Preamble

The House met at half-past Two o'clock

PRAYERS

[MADAM SPEAKER in the Chair]

NEW WRIT

For the borough constituency of Beckenham in the room of Piers Rolf Garfield Merchant Esquire, who since his election for the said borough constituency has accepted the office of steward or bailiff of Her Majesty's Manor of Northstead in the county of York.—[Mr. Peter Ainsworth.]

Oral Answers to Questions — TREASURY

The Chancellor of the Exchequer was asked—

Spending Allocations

Mr. Edward Davey: What discussions his Department has had with the Department for Education and Employment regarding its spending allocations for 1997–98 and 1998–99; and if he will make a statement. [12648]

The Chief Secretary to the Treasury (Mr. Alistair Darling): My right hon. Friend the Secretary of State for Education and Employment and I have many discussions with each other. The House will be aware that, as a result of the windfall tax on the privatised utilities, we were able to allocate almost £4 billion to the Department for Education and Employment, including £1.3 billion to refurbish and repair schools. In addition to that, my right hon. Friend the Chancellor of the Exchequer was able to allocate a further £1 billion for schools spending next year.

Mr. Davey: I am grateful to the right hon. Gentleman for his reply. Does he not accept, however, that because of the difficult overall financial position of local authorities, councils will find it very hard to pass on increases in education spending to schools in full other than by slashing spending on social services? Will he therefore consider either abolishing capping completely, or making minor changes—for instance, introducing a separate and higher cap just for education spending?

Mr. Darling: The hon. Gentleman will no doubt recall that we discussed those matters when I visited his party conference in Eastbourne, but, whatever other effects I had there, my message clearly did not get through to him.
It is necessary for the Government to keep tight control of public spending if we are to achieve the stability that we need for the good of the country's economic future, and if we are to be able to put public spending on a sustainable footing in the future. My right hon. Friend the Chancellor made £1 billion available for front-line teaching next year, from which many local authorities—and, most important, many parents and pupils—will benefit. We make no bones about the fact that the next two years will be very hard, and hard choices will have to be made; but we believe that that is essential if we are to benefit schools in the future.
I should add, for the hon. Gentleman's benefit, that by abolishing the assisted places scheme we have ensured that extra money, over and above the sums to which I have referred, goes into the classrooms where the money counts.

Mr. Heathcoat-Amory: Will the Chief Secretary confirm that higher inflation since the general election has cut the value of public expenditure? In particular, he will be aware that written parliamentary answers from his Department show that revenue spending on education and training will be lower this year than was planned by the previous Government. Does he also agree that next year total public expenditure will also be lower than we planned for the same reasons? Given that these have been confirmed in writing by his Department, will the Chief Secretary take this opportunity to confirm both these points about education expenditure this year and general expenditure next year, and will he do it clearly and without evasion?

Mr. Darling: I knew that the Tories were now the caring party but it seems that they are now the party of public expenditure, which will come as some news not just to the House but to people outside. Of course I am aware of the parliamentary answer to which the right hon. Gentleman refers because I answered it. Surely he must accept two things. First, he cannot possibly say that the spending totals that have been allocated for this year were inadequate because it was his party that allocated them before it left office. Secondly, inflation has increased because the right hon. Gentleman's colleagues failed to take any action to restrain the inflationary pressures in the economy when they had ample opportunity to do so before the last election. That is the legacy that we all have to live with, and we are tackling it through a number of measures.

Petrol Tax

Mr. Stunell: In which year since 1967 the total tax per litre of petrol represented the highest proportion of average male earnings, and in which year the lowest; and if he will make a statement. [12649]

The Financial Secretary to the Treasury (Dawn Primarolo): Tax per litre of petrol as a proportion of average male earnings was highest in the period that the hon. Gentleman asks about—1967—although it is currently higher than it has been at any point since 1982 and it is rising due to the commitment on the fuel duty escalator.

Mr. Stunell: Does the Minister agree that the figures give scope for turning the projected green Budget this


autumn into a genuinely green Budget through the reduction of VAT on insulation materials and a compensating change in fuel tax? That would be fiscally neutral and would environmentally help the Prime Minister to reach the target that he has set for the reduction of carbon emissions.

Dawn Primarolo: I should remind the hon. Gentleman that the commitments on the fuel duty escalator will by 2010 bring in another £2.5 million towards our CO2 target for reducing emissions. His party should make up its mind about where it stands on fuel duty. One minute the Liberal Democrats tell us that they are against rises because they say that such rises damage rural communities, and the next minute they tell us to put them up even higher to save the environment. Which one is it?

Mr. Green: What is the cost to the ambulance service and the police service of the Chancellor's Budget decision to put a 1p higher rate of increase on petrol duty and to advance its date? The Financial Secretary will be aware that that is causing severe difficulties for important public services and adding to the resource problems caused by the Budget.

Dawn Primarolo: The hon. Gentleman should be congratulating us on giving an extra £300 million to the health service this year and £1.1 billion next year, which will adequately cope with its expenses.

Mr. William Ross: While the intention to have a green Budget may be laudable, those who live in the greenest parts of the United Kingdom—the rural areas—have great difficulty in meeting the constantly rising costs of fuel. What do the Government intend to do about that large group of people for whom cars are a necessity?

Dawn Primarolo: I remind the hon. Gentleman that the Government cut VAT on fuel precisely to assist people to keep warm. In assessing future taxes in connection with the environment, the Government must be sure that they are contributing to the CO2 reduction target. Irrespective of where people live they are not excluded from involvement in reaching that target.

Mr. Swinney: Since the Budget was announced in July, has the Minister given any further consideration to developing differential pricing for petrol as between rural and urban communities, and in some way using the duty to influence that proposal?

Dawn Primarolo: Is that yet another policy? The answer to the hon. Gentleman's question is no.

Private Finance Initiative (Schools)

Fabian Hamilton: What assessment he has made of the effect of the reformed private finance initiative on projects for schools. [12650]

The Paymaster General (Mr. Geoffrey Robinson): The House will be pleased to know that the reformed private finance initiative is making good progress on all fronts, particularly schools. Four of the six prioritized

projects identified by the Department of Health were for schools. I imagine that my hon. Friend has one particularly in mind.

Mr. Hamilton: I thank the Paymaster General for that reply. Will he give us an assurance that the valuable development work in PFI Pathfinder schools such as Cardinal Heenan Roman Catholic high school in my constituency—surprise, surprise—will act as a model for the capital investment that is urgently needed in many school buildings?

Mr. Robinson: My hon. Friend is right. Cardinal Heenan is an important Pathfinder school. He will remember that I met its headmaster, the chair of governors and the leader of Leeds local education authority at my office here and that good progress is being made. My hon. Friend will also be aware that Pathfinder projects generally are going well. The Department for Education and Employment is extending great support to that school and I believe that a preferred bidder is shortly to be announced.

Mr. Yeo: How many schools will close and how many teachers will be sacked because of the Government's introduction of a tax on the dividend income of pension funds? Will the Government now give a cast-iron guarantee that councils will be given extra cash next year to meet the higher pension contributions that result from the Government's Budget in July?

Mr. Robinson: I am not sure how that question arises, but let me assure—[Interruption.] I am very pleased that it has arisen. Let me assure the hon. Gentleman that, over the next four years, we are putting £1.3 billion into school buildings. The education budget has been increased and share prices are still higher than at the time of the building, so there has been none of the impact that he wanted perhaps and direly predicted.

UK Investment

Mr. Livingstone: What estimate he has made of when United Kingdom investment as a proportion of gross domestic product will reach the average level for the EU as a whole. [12651]

The Chancellor of the Exchequer (Mr. Gordon Brown): The higher investment that we seek to meet the Government's objective of high and stable employment and growth requires stability as well as the specific measures that the new Government have taken to encourage long-term investment. The Treasury's economic assessment of Britain in Europe, published on Monday, suggests that to be outside economic and monetary union in the long term could damage investment. That is one of the reasons why we support the principle of a single currency.

Mr. Livingstone: May I start by recording my appreciation to the Chancellor for his wise decision to create a vacancy on Labour's National Executive Committee? Does he agree that the major reason why the British economy is weak and is not capable of joining the currency union is that the former Government neglected


investment? Year by year, we were consistently recording investment levels that were barely 75 per cent. of the European average.

Mr. Brown: I agree with my hon. Friend on his second point. For 20 years, British investment compared with that in Europe has been lower than it should have been. With our cuts in corporation tax and our investment incentives, we intend to raise investment, but what would be most damaging, particularly for inward investment into Europe, would be to reject in principle the idea of a single currency. Thirty per cent. of inward investment in Europe, 40 per cent. of Japanese investment in Europe and 50 per cent. of Korean investment in Europe comes to Britain. The Conservative party should answer this question: why does it oppose the principle of a single currency? If the economic reasons for a single currency are compelling, why will it not support it in the national interest?

Mr. Townend: Does the right hon. Gentleman accept that it is the quality, as much as the quantity, of investment that matters? How does the return on investment in the United Kingdom compare with average return on investment in other European Union countries?

Mr. Brown: Of course it is the quality of investment that matters, but there has to be investment in the first place. I heard the hon. Gentleman on the radio talking about the single currency and his principled objection to it and I must tell him that we would not be serving the cause of British industry or investment in Britain well if we opposed in principle a single currency. To improve the quality of investment requires, first, that there is investment. The Conservative party's policies would ruin the possibility of more investment in our country.

Mr. David Taylor: Is the Chancellor aware that his clear line on the single currency has had the unforeseen effect of trapping four British nationals in an alien organisation? Would he care to comment on the dreadful plight of the hon. Members for Esher and Walton (Mr. Taylor), and for Leominster (Mr. Temple-Morris), the right hon. Member for Henley (Mr. Heseltine) and the right hon. and learned Member for Rushcliffe (Mr. Clarke)? Will he urge his ministerial colleagues to refer their case to the International Court of Justice which, unfortunately, sits at The Hague?

Madam Speaker: Order. As the Chancellor knows, he has very little responsibility for that, but perhaps he could pick one or two bones from that flesh.

Mr. Brown: It is just as well that I have no responsibility for the Conservative party in its present condition. My hon. Friend has made a point which is emphasised by the former Conservative spokesman on Northern Ireland who talked about the damage to business that would be caused by objecting to a single currency. He said that our businesses need to prepare for Europe urgently. That is the man who, until yesterday, sat on the Front Bench for the Conservative party.
Only this morning the former Deputy Prime Minister said that the Conservative party was now at war with business. I must ask the Conservative party whether it supports the principle of a single currency—yes or no. If the economic reasons for it are compelling, why does the Conservative party object to it when it is in the national economic interest?

Profit-related Pay

Mr. Fabricant: If he will make a statement on Her Majesty's Government's policy concerning the taxation of profit-related pay. [12652]

Mr. Darling: We believe that profit-related pay should be taxable, like bonus pay and other, similar forms of remuneration.

Mr. Fabricant: I thank the Minister for his answer. Does he recall that, before the general election, his right hon. Friend, the current Prime Minister, visited John Lewis in Oxford street and said that it was a good example—as is the whole John Lewis Partnership—of a stakeholding society? Does he also recall—as far as I recall he was not present in the Committee considering the Finance Bill immediately prior to the general election—that the Labour party spokesman on that Committee said that the Labour party would immediately restore profit-related pay? Is he aware of how betrayed the 34,000 members of the John Lewis Partnership and other such schemes feel because of the lie that we heard in that Committee? Will he now apologise to the members of the John Lewis Partnership and to others who formerly benefited from profit-related pay tax breaks for breaking yet another election promise?

Mr. Darling: If I set aside the hon. Gentleman's rather intemperate remarks, perhaps I can put him right on a number of matters. First, at no time did anyone in the Finance Bill Committee promise, on behalf of the Labour party, that profit-related pay would be restored. I can assure the hon. Gentleman that I was present and, as the then shadow Chief Secretary, had anyone said that, it would probably have been the last thing they would have said on behalf of the Labour party because of the cost involved. What the hon. Gentleman has said is simply not true.
Secondly, John Lewis has an excellent scheme and I am pleased that it has said that it will continue with it. The hon. Gentleman should not make the mistake of believing that a scheme will work only if there is a tax break to go with it. Many employers have schemes that do not rely on tax breaks. The final point that the hon. Gentleman might wish to bear in mind is that, as the parliamentary private secretary to the then Financial Secretary, he voted to abolish the profit-related pay scheme. Therefore, he is in no position to lecture us.

Mr. MacShane: I was present at all the sittings of the Finance Bill Committee and I can confirm what my right hon. Friend the Chief Secretary has said. If the hon. Member for Lichfield (Mr. Fabricant) had got his hair out of his ears, he would have noted that too.
I invite my right hon. Friend to address the question of employee involvement. Has he seen the remarkable evidence from the United States of the success of employee share ownership schemes? More than 10,000 companies, covering 11 million employees, are now owned partly or wholly by their employees. They are profitable, they are creating jobs and they are adding share value.
Could we have a little more enthusiasm from the Treasury, in contrast with the pathetic lip service paid by the previous Government to ESOPs—employee share ownership plans—on the need to get shares into the hands of employees and to get employees directly involved in the ownership and running of their companies?

Mr. Darling: I recall my hon. Friend's contributions on that subject during the Finance Bill—some of them were in Latin. Even though we may not have understood some of what he was saying, we could at least see the enthusiasm with which he said it.
The Government are keen to encourage employee participation in every possible way. We believe that it is very much a part of the stakeholder democracy. Companies that involve their employees, in whatever way is appropriate, ensure that their employees share in the success of their companies and feel part of the common effort. That is something we want to encourage. However, I repeat what I said to the hon. Member for Lichfield (Mr. Fabricant)—a tax break is not the only way to encourage that change of culture.

Competitiveness

Mr. Kirkwood: What steps he proposes to take to protect the competitiveness of exporting manufacturers in the United Kingdom from the adverse effects of high levels of sterling; and if he will make a statement. [12653]

The Economic Secretary to the Treasury (Mrs. Helen Liddell): The Government wish to see a stable and competitive pound over the medium term, consistent with our objective of price stability. One key route to United Kingdom export success is to ensure that there is no return to the boom and bust that we saw over the 18 years of the previous Government. We need to allow companies to plan ahead and to be competitive in the marketplace.

Mr. Kirkwood: I well understand the sentiment behind the Minister's answer. However, is she really aware of the damage to manufacturing exporters caused by the high level of the pound? She will be aware that during the past seven days, Pringle of Scotland—a company that exports the vast bulk of its knitwear—has announced 300 job losses in the Scottish borders.
Will the hon. Lady use her good offices, working with the Minister for Education and Industry in the Scottish Office, to try to produce a package of measures for the communities affected—Hawick, Berwick-upon-Tweed and Galashiels—and to try to save what is left of the knitwear industry and diversify for the future? Will she find time to meet a small delegation from the senior management of Pringle, so that she may hear at first hand about some of the exchange rate difficulties that the company is facing?

Mrs. Liddell: Manufacturing exports are still rising, but I take the hon. Gentleman's point about Pringle. I have been following the matter in the Scottish press. I commend the hon. Gentleman on his prompt action in contacting my office. I will be happy to meet a delegation from the company, and whoever else it wishes to bring,

to discuss these matters. I am sure that my hon. Friends in the Scottish Office will be only too happy to join in that meeting.

Mr. Stevenson: Does my hon. Friend agree that a core economic issue is how to control inflation while also controlling interest rates and exchange rates? Is she aware that in my Stoke-on-Trent constituency about 500 jobs have been lost over the past six months? If she further aware that one of the main reasons cited for that by the pottery industry, which exports 80 per cent. of its products, is the exchange rate? Will she review economic policy and take fully into account the growing and serious concern about the effect of the exchange rate on manufacturing industry?

Mrs. Liddell: The Government fully understand and share the concerns of industry and exporters. However, it is important to remember the significance of ensuring that this country does not return to the boom and bust cycle. I recognise the problems in my hon. Friend's constituency, but since the peak in July there has been a reduction in the value of the pound against other currencies. On his point about reviewing economic policy, I remind him that the economic policy that we have embarked on since we were elected on 1 May is aimed at bringing long-term stability to the economy. By bringing long-term stability, which was so lacking under the previous Government, we hope to get on to the sort of economic footing that will ensure that the vicissitudes of the marketplace that are occurring in my hon. Friend's constituency cease to have the same impact.

Mr. Ruffley: Given the Government's commitment in principle to joining economic and monetary union, will they give a commitment also, in principle, to joining the exchange rate mechanism? If they will not, will it not be merely another example of the Government running scared of British public opinion?

Mrs. Liddell: My right hon. Friend the Chancellor has made it perfectly clear that we have no intention of joining the ERM.

Mr. Skinner: Is it not also true to say that, in a highly technological world, people who export must also import if they are to provide their exports? There is an argument about swings and roundabouts in the value of the pound, and we should take no notice of those tinpot Liberals. We should remember that previous Labour Governments have devalued the pound, and previous Labour Governments have not managed to secure a second full term in office.

Mrs. Liddell: My hon. Friend is right in the points that he makes about the Liberals, who are consistent on nothing. I take the point that he makes, and I can assure the House that the Government intend to secure an economy that is on a stable and sound footing.

Mr. Lilley: Further to the answer that the Economic Secretary to the Treasury gave to my hon. Friend the Member for Bury St. Edmonds (Mr. Ruffley), does she recall the Chancellor saying that the Maastricht criteria should be applied without fudging? She will be aware that one of the treaty criteria is participation for two years in the exchange rate mechanism without devaluing against


member currencies. Will she explain why the Government do not think that it is in Britain's interests to rejoin the exchange rate mechanism?

Mrs. Liddell: The right hon. Gentleman asks an intriguing question. The criterion is exchange rate stability. The House will be interested to learn from him, however, what action the Conservative party is prepared to take, and which faction of the Conservative party has the ascendancy this afternoon as distinct from this morning.

Mr. Lilley: The Economic Secretary might consult the treaty to learn that the criterion is participation in
the Exchange Rate Mechanism … for at least two years, without devaluing against the currency of any other member state.
She has not answered the question why she believes that a two-year apprenticeship in the exchange rate mechanism would be damaging for Britain, whereas a lifelong membership of the more onerous single currency will automatically be in our interests.

Mrs. Liddell: I will answer the question quite clearly so that the right hon. Gentleman can understand it: the issue is exchange rate stability. I wonder whether he would care to answer my question about the position of the Tory party today.

Business Fluctuations

Dr. Iddon: What steps he is taking to end major fluctuations in the business cycle. [12654]

Mr. Darling: The Government have taken decisive action to strengthen economic stability. As my hon. Friend the Economic Secretary said, the damaging boom and bust legacy that we inherited has been extremely damaging to British industry. We attach great importance to stability, openness and transparency of policy—because from them flows the credibility that world markets now demand.

Dr. Iddon: Does my right hon. Friend agree that the Government have established a framework for monetary policy that is transparent, accountable and the best in the world? Does he agree also that the monetary policy reforms signal the Government's intention to get away from the boom and bust policies and short-termism of the past, allowing the United Kingdom to take decisions with the long-term interests of the economy rather than political expediency in mind? Does he think that the Conservatives will support the Bank of England Bill?

Mr. Darling: If Conservative Members cannot tell us their policy on the European single currency, perhaps they can tell us their policy on supporting the Bank of England Bill, which was introduced earlier this week; we shall see. My hon. Friend is quite right that we must have stability if we are to put the economy on a long-term footing and create an environment that encourages investment and increases prosperity. Our reforms—which the Bank of England Bill will soon introduce—are a part of that process. Those reforms must be considered alongside the actions taken this year by my right hon. Friend the Chancellor in his Budget, which were geared to achieving

long-term stability, reducing the high debt level that had been encouraged and creating a climate in which British business can flourish.

Mr. Flight: Does the Minister accept the view of the International Monetary Fund that exchange rate flexibility is necessary to cushion business cycles, as has been witnessed recently in south-east Asia? The view has also been relevant to Europe and America over the past few years, and is supported by most central bankers.

Mr. Darling: The hon. Gentleman seems to forget that it was his party which took this country into the exchange rate mechanism, although it seems that the Conservatives are now collectively sorry for it. I am happy to accept that the IMF has been complimentary about the conduct of the economy in the hands of my right hon. Friend the Chancellor.

Domestic Fuel (VAT)

Mrs. Mahon: If he will make a statement on the reduction in VAT on domestic fuel. [12655]

Mr. Ruane: What representations he has received on his reduction in VAT on domestic fuel from 8 per cent. to 5 per cent. [12657]

Mr. Gordon Brown: The change to a 5 per cent. rate on VAT came into effect on 1 September, benefiting all households well in time for winter fuel bills. This honours our manifesto commitment to the people of Britain.

Mrs. Mahon: I thank my right hon. Friend for that answer. Does he agree that the manifesto pledge that we kept will stop the obscenity of pensioners having to choose between eating and heating?

Mr. Brown: Not only have we cut VAT on fuel but we have abolished the gas levy. At the same time, in our welfare-to-work programme we are introducing an insulation programme to enable elderly people to insulate their homes against the winter cold. These measures add up in only 18 weeks to far more than the previous Government did in 18 years.

Mr. Ruane: I thank my right hon. Friend for his comments. My constituency, Vale of Clwyd, has the second highest number of pensioners in Wales, and his announcement will go down well there. Does my right hon. Friend have any further proposals to promote warmer homes, such as a reduction in VAT on insulation schemes?

Mr. Brown: That is part of a review that we promised at the time of the Budget—and, indeed, before the election—which will report soon. As for the measures that we are taking to protect elderly people against the winter cold and to enable them to have better insulated homes, the environmental task force being set up under the welfare-to-work programme will have a significant role to play. I accept that for elderly people, whose fuel bills are a far higher proportion of their income and expenditure, Government action is necessary. However, I remind my hon. Friend that if the Conservative party had had its way,


VAT on fuel would have been 17½ per cent.—it was the Labour party that stopped it rising to 17½ and then reduced it to 5 per cent.

Mr. Robathan: How does the Chancellor balance the electorally popular measure of reducing VAT on fuel with the hard choices, about which the Prime Minister spoke, involved in reducing carbon emissions? Is not the policy of reducing VAT on fuel in direct contradiction to the hard choices involved in reducing carbon emissions and the incremental growth in taxation on petrol?

Mr. Brown: If the hon. Gentleman is saying that the policy is in direct contradiction to the objective of energy efficiency, I assume that the Conservative party is pledging at the next election to raise VAT on fuel from 5 per cent. to 8 per cent. and perhaps to 17½ per cent. When the Opposition Front-Bench spokesman rises to speak, perhaps he will tell us what the Conservative policy is. Only a few minutes ago, when talking about the environment, my hon. Friend the Financial Secretary spelled out all the measures that have been taken to honour the Prime Minister's commitment on the environment. We are an environmentally friendly Government who are dealing with the problems of energy efficiency and insulation.

Mr. Boswell: Before the Chancellor overdoses on self-congratulation, will he confirm, as the Economy Secretary has already done in the House, that had he not deftly chosen to manipulate the implementation date of the reduction in VAT on fuel—introducing it on 1 September, before the pensions uprating, rather than after it on 1 October—the state pension would have risen next April by an additional £6.23 per year for a pensioner couple and £3.90 per year for a single pensioner? Has not his manoeuvring taken that money directly out of the pockets of pensioners?

Mr. Brown: Here we see the Conservative party in action. [HON. MEMBERS: "Answer."] It is about time the Conservatives listened to what is happening. They are saying again that VAT on fuel should not have been reduced in September and that we should have waited longer, letting pensioners suffer during the winter. We were not prepared to do that.

Inflation

Mr. Beith: If he will make a statement about the impact of inflation on his public expenditure projections. [12658]

Mr. Darling: Public expenditure figures are based on cash planning. A key principle of spending control for two decades has been that there should be no automatic adjustments for inflation, because that would just build inflation into the system. We are committed to controlling public expenditure and keeping a firm grip on inflation.

Mr. Beith: Nevertheless, so that false expectations are not aroused, will the Chief Secretary confirm that, even with the very welcome extra £270 million, the national health service budget will be £150 million lower in real terms than was planned by the previous Government?

Mr. Darling: As I said earlier, we are committed to maintaining tight control over public expenditure. That is

very important if we are to put the public finances on a sound long-term footing. No one could accuse us—or me in particular—of raising false expectations. I have never shrunk from saying that some hard choices will have to be made during the next two years. However, we have allocated an additional £300 million for the health service for the coming winter and an extra £1.2 billion for next year. That money would not have been available had the Conservatives still been in office. The health service will benefit greatly from that, as it will from other measures that we are taking to improve patient care.

Mr. Paice: Will the Chief Secretary tell the House the precise impact on inflation of his right hon. Friend's Budget this summer?

Mr. Darling: As the hon. Gentleman will know, I have answered many parliamentary questions to his colleagues, and perhaps even to him, in which I have made that clear. We have given real-terms increases to health and education, which will benefit patients and people in schools. I am not prepared to take lectures from the Conservatives, who left public finances in a ruinous state and left record levels of debt, having doubled the national debt over six years. Their failure to take action to control inflation has meant that we have had to make tough choices and take the necessary action that they ducked on every occasion.

Single Currency

Mr. Rammell: How he proposes to further the public debate on the implications of a single currency. [12659]

Mr. Gordon Brown: In addition to publishing a guide to economic and monetary union, with a special edition as a guide for business, the Government are preparing for economic and monetary union by setting up a steering group, led by the president of the Confederation of British Industry, the Governor of the Bank of England, the chairman of the Association of British Chambers of Commerce, and Ministers. We are also planning sectoral and regional consultations on the single currency to start from January.

Mr. Rammell: I thank my right hon. Friend for that response and congratulate him on his statement this week, which was the most positive statement on economic and monetary union that we have heard from a British Government. Does my right hon. Friend agree with the Tory Reform Group, which stated this morning that the Leader of the Opposition's tactics on EMU have united the Government and business against the Conservative party?

Mr. Brown: I quite understand my hon. Friend's remarks. Because the Conservatives cannot tell us whether they support the principle of a single currency or whether they will put a national economic test above all others, they have lost the support of business. They are the anti-business party in Britain today. Confirmation of that, if it was needed, has come from the Tory Reform Group and the remarks of the right hon. Member for


Henley (Mr. Heseltine), the former Deputy Prime Minister, who said this morning that the Conservative party is at war with business.

Dr. Julian Lewis: In the light of his repeated comments this week that all that matters are the economic tests, will the Chancellor explain what he would do if other countries went ahead with economic and monetary union and—against the expectations of people on both sides of the House, including me—it succeeded economically but the tests failed democratically? What would the Government's view be if a new regime emerged that destroyed the democratic freedoms of those countries?

Mr. Brown: The hon. Gentleman does not seem to understand my statement on Monday. I said that we supported the principle, that we would apply economic tests, that national economic interests would be decisive in the Government's recommendation and that the people would have the final say. The hon. Gentleman should tell us whether his party supports the principle of a single currency or not. I understand that Conservative Members went to Eastbourne to sort the matter out in what they called sessions for bonding. I gather that they were split up into small groups—and that is literally the position in which they are now.

Mr. Winnick: I am aware of all the fiscal constraints involved. Arising from what my right hon. Friend has just said, is there not a case for public money being used for another prolonged bonding session for the Conservative party so that it can try to sort out the issue? May I also suggest that it could be held at Henley and that a few more records of wartime songs could be thrown in at evening sessions?

Mr. Brown: I offer the shadow Chancellor the chance—with your permission, Madam Speaker—to tell us whether he supports the principle of a single currency or not. Within the Conservative party, there is now a five-year group, a 10-year group, a 30-year group and a group that will never go into the single currency. If the Conservative party does not support a single currency for the foreseeable future, it will not be a single party for the foreseeable future.

Mr. Malcolm Bruce: Does the Chancellor accept that many in this country believe that economic tests are the only basis on which a decision to join a single currency should be made? It is conceivable that those tests may arise within this Parliament. Will the Chancellor accept, therefore, that it is imperative to mobilise public opinion to ensure that we get support for a commitment to enter a single currency? Does he agree that the split within the Conservative party at least creates the opportunity for a cross-party campaign that can ensure a yes vote in a referendum whenever it comes?

Mr. Brown: I respect the hon. Gentleman's long-standing commitment to a single currency. I think, however, that on reflection, he will agree that getting it right is more important than getting it quickly. If he believes, as I do, that the economic tests must be met and that we need a sustainable and durable period of convergence, he must accept that that will take time. What

he found on Monday was a Government prepared to make the preparations. I hope that he will support us, not only in the standing committee that will deal with the preparations for monetary union, but in our attempt to inform and to show the people of Britain what monetary union can mean. What happened on Monday is that we were the first Government who were prepared to support the principle of a single currency. We are still waiting for an answer from the Conservative party.

Mr. Todd: In the Chancellor's welcome statement on Monday, he addressed the lack of convergence between our economy and that of our European neighbours. Will he give some information on how we shall measure that convergence over the next few years, picking out particularly the element of interest rates, on which he laid so much emphasis?

Mr. Brown: My hon. Friend makes a good point. We have laid down five economic tests. They include investment and what impact the single currency will have on it, whether there is sufficient flexibility to withstand shocks, whether the business cycles are convergent, and the impact on jobs. We can set these tests down because we have been prepared to say that we support the principle of a single currency. Until we clarify the Opposition's position—do they support a single currency or not—we cannot move further in understanding it. The leader of the Conservative party said at one stage:
We should say very clearly that we have principled objections to a European single currency. If in some future decade, that is no longer the case …
He is a Conservative leader who has principles for one decade, but who may drop them in the next. That is the sort of party we are dealing with.

Mr. Nicholls: If, as is inevitable, there comes a point when the interests of this country are not the same as the interests of the rest of Europe, whose interests does the Chancellor think will prevail in this brave new world—the interests of this country or the interests of the rest of Europe?

Mr. Brown: It is precisely because we have set national economic tests for Britain which have to be met that we can say that the decision will be made in the national economic interest. Even if the economic arguments for a single currency were compelling and it was in the national interest to go in, the Conservatives cannot say that they would recommend doing so. I suggest that they return to Eastbourne and have another bonding session to see whether they can sort things out.

Interest Rates

Dr. Lynne Jones: If he will make a statement on the level of interest rates. [12660]

Mr. Gordon Brown: Interest rates are now set by the Bank of England with the aim of meeting the Government's inflation target. I am satisfied that the new arrangements will deliver long-term price stability and prevent a return to the cycle of boom and bust.

Dr. Jones: Does my right hon. Friend agree that the Government need to give high priority to policies that will


reduce interest rates and improve the competitiveness of the pound in preparation for joining the single currency? Would not the prospect of Britain joining sooner put us in a strong bargaining position to argue for a slowing down of the bandwagon to 1999?

Mr. Brown: We have made it absolutely clear that it is not practical for Britain to join in 1999, as the economic tests that we have set are not being met.
As for the level of interest rates now set by the Bank of England, we inherited circumstances in which inflation was about to rise as a result of the previous Government's failure to take action. We are not prepared to contemplate pursuing the same stop-go boom and bust policies that bedevilled the country for the past 20 years under a Conservative Government and were responsible for thousands of jobs and businesses being lost unnecessarily as a result of recession. That is why we took the action that we did and made the Bank of England independent and put it in operational charge of interest rates.
We still need an answer. Is the Conservative party now opposing our proposals to give independence to the Bank of England?

Mr. Wilkinson: Is it not one thing to have an independent national central bank, namely the Bank of England, but constitutionally and practically quite another for our interest rates to be controlled by an independent, unaccountable central bank in Frankfurt over which the British people have no democratic control whatsoever and whose actions could decimate British jobs and do incalculable harm in this country? How can the Chancellor continue to say that there are no constitutional implications to a single currency?

Mr. Brown: I take it that we have the answer to at least one of my questions: the hon. Gentleman is opposed to the principle of a single currency. On Monday I made it clear that there was a pooling of economic sovereignty involved—[Interruption.] If the hon. Member for Buckingham (Mr. Bercow) wants to follow the debate, he should really be in the Chamber and look at the issues. I said quite clearly on Monday, as he will acknowledge, that a pooling of economic sovereignty was involved. We have to ask ourselves whether there is a constitutional bar to economic and monetary union as a result. We say no. What does the hon. Gentleman say?

Mr. Bercow: rose—

Madam Speaker: Mr. Bob Blizzard.

Beer Imports

Mr. Blizzard: What steps he will take to recover revenue lost from bootleg imports of beer. [12662]

Dawn Primarolo: The Government take excise smuggling and fraud very seriously. Customs is currently deploying addition officers to front-line work in the Dover area to counter those involved.

Mr. Blizzard: I thank my hon. Friend for that reply. Brewers in my constituency will welcome the deployment of extra staff and the review of the matter. Does my hon. Friend agree, however, that the scale of bootlegging is so large that French beer occupies about 5 per cent. of the British market and 70 per cent. of it is smuggled beer? That represents a huge loss to the public purse and a huge threat to the British brewing industry and to jobs. It is also resulting in gangs being involved in violent criminal activity. Does my hon. Friend accept that the root cause of the problem is the large differential between the rates of duty on French and British beer? Will she therefore seriously consider the case put to the Treasury that if beer duty were reduced by 20 per cent., within three years there would be a net gain to the Exchequer and an increase in employment of some 60,000 jobs?

Dawn Primarolo: As I have said to my hon. Friend, to put the matter in proportion, the loss to the Treasury from smuggling was something like £120 million in 1996–97, against a total income of £4.9 billion in duties from beer. That estimate is based on figures agreed by the brewers. Although my hon. Friend is absolutely right to draw attention to the problems of growing crime and its associations with extensive importing of French beer, the answer is not harmonisation of duty rates. The answer is collaboration, as we have demonstrated through the review that we have set up to tackle excise fraud, to deal with crime and competitive issues and address health issues.
Frankly, I find the idea that we could cut our duties—as the brewers propose—and lose £3 billion in revenue and somehow make that up in increased consumption in three years a little hard to believe.

Miss McIntosh: Is the Minister prepared to look at the facts and figures provided by the Wines and Spirits Association, which confirm the point made by the hon. Member for Waveney (Mr. Blizzard) that millions of pounds are lost to the Treasury from bootleg imports not only of beer but of wine and spirits, including the produce of the Chancellor's and my own country, Scottish whisky? Most of the duty on Scottish whisky is lost through bootlegging. Does the Minister agree that it is a misuse of public resources to increase the use of agents to apprehend bootleggers and that, as the hon. Gentleman suggested, the money could go to the Revenue as genuine income?

Dawn Primarolo: When the Conservative Government reduced duty on Scottish whisky, the producers responded by putting up the price, not putting it down. If the case was so strong that a price reduction was necessary to assist in combating smuggling, perhaps they should have reflected on the increase before they implemented it. All producers—of wine, spirits and beer—are actively involved in the Government's review. Discussions are under way about the exact scale of the problem and agreement will be reached in solving it in partnership between industry and Government.

Economic Stability

Mr. Cranston: What measures he is taking to strengthen economic stability in the United Kingdom. [12663]

Mrs. Liddell: As my right hon. Friend the Chancellor has already made clear this afternoon, the Government have taken decisive steps to strengthen economic stability. In May, we established the new framework for monetary policy, giving operational independence to the Bank of England. In July, my right hon. Friend introduced the deficit reduction plan, based on tough fiscal rules, designed to put public finances on a sustainable course.

Mr. Cranston: Does my hon. Friend agree that market expectations indicate that interest rates will go down next year and that, since May, long-term interest rates have gone down by 1 per cent.? Does that not show that the measures taken by the Government since May have directly encouraged economic stability?

Mrs. Liddell: The measures taken by my right hon. Friend the Chancellor were aimed at the long term. In fact, since his announcement in May, long-term interest rates have fallen. The Government are seeking to bring about a climate of stability which was sadly lacking. All of us remember the Ken and Eddie show, when interest rates went up, went down and then went up again. That is not a sustainable way to run an economy. In the long term, we hope that companies and individuals will be able to plan ahead with a degree of consensus, with politics taken out of the setting of interest rates.

Mr. Brooke: If the Government claimed to be so clear and so economically stable on Monday, why did the markets so misunderstand them in the previous 30 days?

Mrs. Liddell: Given that share values are up since May, I find the right hon. Gentleman's point rather difficult to take. The action that my right hon. Friend the Chancellor took in giving operational independence to the Bank of England has been widely welcomed. The only answer that we cannot get is whether the Conservative party is prepared to support the Bank of England Bill. Conservative Members have been asked three or four times this afternoon for a response but have failed to give one.

Taxation

Mr. Sheerman: If he will assess the advantages of applying taxes to resources rather than labour. [12664]

Dawn Primarolo: The Government's statement of intent on environmental taxes, issued in the July Budget, demonstrates our commitment to the use of economic instruments to achieve environmental objectives. However, we will look at the advantages and disadvantages of taxes on a case-by-case basis. In each case, it is important to consider all the effects of a tax, including its distributional impacts, and any implications for competitiveness.

Mr. Sheerman: My hon. Friend will know that the decision by the Chancellor to examine the issue of environmental taxation seriously, rather than going for a quick fix, was widely welcomed. I ask the Government to continue the work on environmental taxation and to consider—with no prejudice—the landfill tax introduced by the right hon. and learned Member for Rushcliffe (Mr. Clarke) in his penultimate Budget. It has been very effective in changing the environment. I hope that we can build on that rather than ignoring it.

Dawn Primarolo: I confirm that the cross-party support for the introduction of the landfill tax, which has been a successful measure—its first year of operation is currently being reviewed by the Government—is an excellent example of how an environmental tax can work.

Mr. Gibb: Given the European Union tax harmonisation proposals, which were discussed by the Chancellor at the recent Economic and Finance Council meeting, is it the Government's long-term intention to hand over direct tax policy to Brussels? Or will the Financial Secretary today commit the Government to vetoing those proposals at the next ECOFIN meeting?

Dawn Primarolo: As the hon. Gentleman well knows, we have a veto and we have always declared our intention to use it when that best serves British interests.

Counter-terrorism Legislation

The Secretary of State for the Home Department (Mr. Jack Straw): With permission, Madam Speaker, I wish to make a statement about the Government's plans for reforming the existing framework of counter-terrorist legislation, including the provisions which relate to exclusion orders.
In the past 25 years, terrorism has exacted a terrible toll. Many people have lost their lives. More than 3,000 people have died in Northern Ireland alone. Businesses have been destroyed. Substantial damage has been wrought on our towns and cities. The very infrastructure of our nation has been attacked. That is not just the result of Irish terrorism. International terrorists too have cost us dear.
In the past 20 years, there have been more than 80 international terrorist incidents in this country. No one here today will forget the shooting of Woman Police Constable Fletcher outside the Libyan People's Bureau in St James's square, London in 1984, or the attack in 1988 on the Pan Am airliner over Lockerbie, when 270 people were killed by the blast. More recently, there have been the attacks on the Israeli embassy, and Balfour house in 1994. Only last January, letter bombs were sent to the London offices of an Arabic language newspaper, which seriously injured two security guards.
In combating this threat, we owe an enormous debt to the vigilance of the police and the security forces. I am sure that the House joins me in paying tribute to their work. They have had many successes in capturing and prosecuting terrorist suspects. The convictions of six IRA terrorists at the Old Bailey last July are but the latest in a long line.
In Northern Ireland, there has of course been a very welcome change for the better. The IRA and a number of loyalist groups have declared ceasefires. Currently those are holding. Substantive talks between the parties have begun. There is real cause for optimism that a lasting peace may be achieved in Northern Ireland. A negotiated political settlement is—as we are all agreed—the only way forward.
However, the ceasefire in Northern Ireland and the possibility of achieving lasting peace does not mean that we no longer need special legislation to investigate, to disrupt, and to counter terrorism. There are extremists on both sides of the divide in Northern Ireland who are opposed to the present ceasefires and who want the talks process to fail, as this morning's explosion in Londonderry shows.
On the international front, there is ample evidence of the activities of terrorists, whether sponsored by unfriendly Governments or acting in more or less organised groups. Some of these international terrorists may commit acts of terrorism within the United Kingdom or raise funds here, and others might use the United Kingdom as a base from which to launch attacks elsewhere in the world. In the face of such threats, we cannot—and we will not—drop our guard. Terrorists change their tactics all the time. Therefore, we must remain vigilant at all times and ensure that the police and the security forces have the powers which they need.
The current legislative framework for combating terrorism in the United Kingdom is contained principally in the Prevention of Terrorism (Temporary Provisions)

Act 1989 and the Northern Ireland (Emergency Provisions) Act 1996. Both Acts represent the latest versions of emergency legislation first introduced in the early 1970s in response to the very serious attacks which had taken place within the United Kingdom.
This legislation has been regarded by successive Governments as exceptional but temporary, to be removed as soon as circumstances would allow; but 25 years of attacks and the continuing threat from terrorists make a mockery of the suggestion that legislation to combat terrorism can, or should any longer be, regarded as only temporary.
What is needed is permanent legislation to deal with the continuing threat from terrorism and the terrorist. I shall say more about that in a moment, but first I shall explain the Government's intentions, in advance of new legislation, in relation to the exclusion powers of the 1989 Act. As the House well knows, the exclusion powers in the prevention of terrorism Act enable the Secretary of State to exclude from the whole of the UK, or a part thereof, anyone who he is satisfied is or has been concerned in the commission, preparation or instigation of acts of terrorism in connection with the affairs of Northern Ireland.
Unlike the powers to exclude under immigration legislation, the powers apply equally to British citizens as well as to the nationals of other states. In recognition of this, the powers have been used sparingly in recent years. Let me give the House the figures. In 1982, there were 248 orders in force. By 1994—just before the last ceasefire—the number had dropped to 74. During that ceasefire, the then Secretary of State for Northern Ireland revoked all the remaining 10 orders which he had made.
No order was made in 1996 or 1997 by my predecessor as Home Secretary against anyone who had not been previously excluded. This was despite the fact that the ceasefire had ended. When I took office on 2 May, the number had fallen to 22. For some years now, therefore, the power has been withering on the vine. During the last six months, I have considered 12 cases, as the law has required me to do. Of these, I have renewed two orders and either revoked or allowed to lapse the other 10.
As the House knows, the Government have long been opposed to these powers on the grounds that they were of limited utility and amounted to a form of internal exile without trial. This view is widely shared in this House and outside.
In 1987, Viscount Colville conducted a thorough review of anti-terrorist legislation on behalf of the previous Administration. In his report, Viscount Colville described the exclusion powers as "draconian", and recommended that they be removed from the statute book. He made that recommendation despite the fact that there was a continuing and active terrorist threat and that no ceasefire was in prospect. The exclusion powers have not only exposed the UK to severe criticism from our friends but have provided an easy argument for the apologists for terrorism to use against us.
Taking into account the view of those who advise me on security matters, I can therefore tell the House that—assuming the situation does not change—I am minded to allow the powers to lapse when the Act comes up for renewal next year. In the light of the recent developments in Northern Ireland, I have come to the conclusion that, at present, the exercise of these powers is no longer


expedient to prevent acts of terrorism in relation to each of the 12 outstanding orders. I have therefore today revoked the last 12 orders.
In taking a fresh look at the whole of the legislation to see how it can be improved and strengthened, much of the groundwork has been done for us by the inquiry team led by Lord Lloyd of Berwick. The House will recall that he was asked in December 1995 to consider whether there would be a need for specific counter-terrorism legislation in the United Kingdom in the event of a lasting peace in Northern Ireland. His report was published in October last year. He concluded that there would be a continuing need for permanent United Kingdom-wide legislation.
Lord Lloyd made a number of detailed recommendations for changes to the definition of terrorism, to the powers to proscribe terrorist organisations and to the powers of the police to investigate and arrest those suspected of terrorism. His report was, of course, predicated on there being a lasting peace in Northern Ireland. That desirable state of affairs has yet to be achieved; but that does not mean that we cannot consider his recommendations and, if appropriate, implement them in the interim.
My right hon. Friend the Secretary of State for Northern Ireland and I therefore intend to present proposals to replace both the current Acts with permanent United Kingdom-wide counter-terrorism legislation. We intend to publish the proposals in the form of a consultation paper early in the new year. That paper will draw on Lord Lloyd's most helpful analysis and recommendations. Indeed, I hope that he will contribute further to our thinking.
In the interim, the police and the security forces must have the powers they need to combat terrorism. I therefore intend to seek the agreement of the House in March next year to the renewal of the Prevention of Terrorism (Temporary Provisions) Act 1989. Similarly, the Northern Ireland (Emergency Provisions) Act 1973 expires in August next year, so my right hon. Friend the Secretary of State for Northern Ireland will introduce a Bill to extend its life and to make some amendments to it. The introduction of that Bill will follow later today.
Terrorism is not now a temporary phenomenon anywhere in the world. We need a robust and clear set of powers to enable the police, the security forces and the courts to deal effectively with all forms of terrorism for the foreseeable future, with the flexibility to respond to emergencies should they arise.
Like Lord Lloyd, the Government envisage that some existing powers will be confirmed and placed on a permanent footing; that some will be strengthened; and that others will substantially be changed. For example, it has long been our view that there should be a judicial element in the extension of detention process.
Our overall aim will be a framework of laws that are both effective and proportionate to the threat, against the background that the Government will never drop their guard in the fight against terrorism. I commend the proposals to the House.

Sir Brian Mawhinney: I start by thanking the Home Secretary for his courtesy in giving me an early sight of his statement. I join him in praising the bravery, courage and fortitude of our police, emergency services and security forces in the face of

terrorist attack. I know that he will understand if, as a former Northern Ireland Minister who had the privilege for some time of being responsible for the security forces in Northern Ireland, I pay especial tribute to them for the work that they do; in particular, I single out the Royal Ulster Constabulary.
I also join the Home Secretary in expressing appreciation for the behaviour and character of the British people, in both Great Britain and Northern Ireland, who have controlled their temper in the face of vicious attack and provocation, and have refused to be swayed from the rule of law by the men of terror.
I assure the Home Secretary that we stand with him in resolutely rejecting international terrorism. I hope that he will agree that those on both Front Benches share a determination not to allow the United Kingdom to be used as a haven or a base for international terrorists. Does the Home Secretary also accept that we agree with Lord Lloyd on the need for on-going legislation, and that we look forward to the consultation paper?
The Home Secretary said that he had long opposed exclusion orders. Whatever his personal views may be, his party voted against the annual renewal of the PTA from 1983 to 1995—not acts that inspired much confidence in the Labour party. It abstained for the past two years because it sniffed an election coming. Does he accept that, while that ambivalence makes his commitment to permanent legislation the more welcome, it also means that, when his proposals emerge, they will need to be examined more carefully than usual because of Labour's record?
I have four further questions. The Home Secretary reminds us that he is required by law to examine each exclusion order. Given that 12 were revoked today, what political considerations did he take into account in deciding that they should suddenly be revoked?
Secondly, I hope that the Home Secretary and the Secretary of State for Northern Ireland will not misunderstand me if I say that proposals such as those just outlined to the House, introduced perfectly legitimately by Government as a review of existing legislation but while the peace process is continuing, are bound to raise—at least in the minds of some—the possibility of linkage between the two events, especially as the Secretary of State for Northern Ireland has been associated with the Home Secretary's statement. In coming to this decision today, has he or the Secretary of State for Northern Ireland received representations from members or officials of any other Government or from Sinn Fein that in any way influenced the Government's judgment in today's statement?
Thirdly, can the Home Secretary reassure the House that the decision to drop exclusion orders fully took into account any advice that he may have received from his security advisers?
Fourthly, I note that a consultation paper will appear early in the new year, and we look forward to reading and examining it, and to responding to it. Does the Home Secretary recognise that the new permanent legislation to which he referred should not be determined until the outcome of the Northern Ireland talks process is known?
The Home Secretary understands that we are fully supportive of the talks process, and I know that the Secretary of State for Northern Ireland realises that, too, but the Home Secretary himself pointed out that the


outcome of the talks is uncertain. Will he assure the House that no change to permanent legislation will be made until the outcome of the talks is known, so that the outcome of the talks can influence the judgments that go to make up the final proposals? Finally, does the Home Secretary accept that, in the meantime, we welcome his determination to keep so-called emergency legislation in place?

Mr. Straw: I am grateful to the right hon. Gentleman for his opening remarks. I should like to place on record on behalf of my right hon. Friend the Secretary of State for Northern Ireland and myself a reinforcement of his expression of gratitude, particularly to the Royal Ulster Constabulary, whose bravery and courage in dealing over 25 years with an appalling terrorist threat has no equal anywhere in the world.
The right hon. Gentleman tried to rework old debates about our attitude to the prevention of terrorism Act. I have only to remind him that it was my right hon. Friend the Prime Minister who said:
It is not in dispute, and never has been, that we need anti-terrorist legislation."—[Official Report, 9 March 1994; Vol. 239, c. 300]
That was never the issue between our parties when those matters were debated.
The right hon. Gentleman asked me four questions. I want to give him precise answers to each one. He asked whether I took any political factors into account when, as I was required to do, I examined the merits of each of the outstanding 12 orders that I have decided today to allow to lapse. The answer to that is no.
The right hon. Gentleman asked whether we had received any representations from any other Government or from Sinn Fein asking us to make a statement such as this. The answer on behalf of both my right hon. Friend the Secretary of State for Northern Ireland and myself is no.
The right hon. Gentleman asked whether the decision on dropping exclusion orders took account of the views of those who advise me on security matters. The answer to that is yes.
The right hon. Gentleman asked me, lastly, whether I would undertake not to introduce any permanent legislation in the House before there was a clear outcome to the talks process which is currently taking place in the north of Ireland. The answer to that is also no, and I want to explain the reason for that.
In his second question, the right hon. Gentleman sought to know whether there was any direct linkage between what I have announced today and the talks process. I gave him a categorical undertaking that there was not. What we seek, and what I believe, by their actions, the previous Government sought to do, is to establish a base of permanent anti-terrorist legislation which is sufficiently robust and strong to cope with both periods of relative peace in terms of the internal threat and emergencies such as the failure of the ceasefire, and to deal with the continuing international terrorist threat.
I give the right hon. Gentleman an undertaking that there will be sufficient time after the publication of our consultative document to take full account of the views expressed by hon. Members on both sides of the House.

Mr. David Trimble: As the Home Secretary knows, Ulster Unionist Members have long

been in favour of a single permanent United Kingdom-wide anti-terrorism law. Is not the reality that, under the fine words of the Home Secretary, the substance is a significant relaxation of the stance of the Government with regard now to exclusion orders and also to internment, and the changes foreshadowed on arrest and detention powers? Does not considerable naivety underlie that?
As both Secretaries of State must realise, as terrorists in Northern Ireland realise that their desire to set aside the consent principle will not be satisfied, we shall see a return to violence in Northern Ireland. Indeed, we have seen violence today in Londonderry. Can the Secretary of State give us any further information on the bomb in Londonderry? I believe that Semtex was used in the bomb, which is available only to the Provisional IRA. That may be a significant development.
The Home Secretary referred to Lord Lloyd's report. He knows that, in that report, Lord Lloyd recommended change in the law on the admissibility of wire-tap evidence, something that the Royal Ulster Constabulary has sought for a long time. I know that there are arguments and foolish attitudes on the matter in some quarters, but could we not at least ensure that the law is changed in Northern Ireland, as the previous Government undertook to do, in advance of permanent legislation?
Could we also see something happen with regard to witness protection schemes? Far too often in Northern Ireland we have seen cases collapse because witnesses would not come forward. The Home Secretary paid tribute to the RUC. RUC men have been murdered and their killers not brought to justice for precisely that reason. That is something on which measures need to be taken.
Exclusion orders were a lazy and not particularly effective form of control. We need more effective forms. Can we really have that without the practices that are common elsewhere in the European Union with regard to identity cards and checks on movements of persons?

Mr. Straw: Let me deal with each of the hon. Gentleman's points in turn. He accused us of relaxing our views on anti-terrorist legislation. No one listening to my statement could objectively take that view. He confirmed his long-held opinion of exclusion orders. In reaching this decision, I took into account the view which, for example, he expressed in the House on 9 March 1994, when he said:
We consider exclusion orders to be objectionable in principle.
He went on to make the point in respect of non-British citizens, which is an important point, that action to exclude non-British citizens
is possible under immigration law."—[Official Report, 9 March 1994; Vol. 239, c. 314.]
That remains the case. Later this afternoon, a Bill will come before the House to provide a proper process to give effect to such orders to exclude.
The hon. Gentleman asked about Lord Lloyd's proposals in respect of section 9 of the Interception of Communications Act 1985. That is a complicated issue. Lord Lloyd sought to distinguish between interception evidence that arose in respect of a national security investigation—which he said should be adducible in evidence—and other interception evidence, from a customs, police or Security Service intercept, in respect of the investigation of a serious crime, which he said should not be adducible in court.
That is one of the most complex of Lord Lloyd's recommendations. Many take the view that it is very difficult to draw the distinction in practice. There is much to be said on both sides of the argument about whether intercept evidence should be adducible in court; I continue to consider the matter carefully, and will be happy to take advice from hon. Members, particularly those who have had experience of the matter.
The hon. Gentleman asked about the composition of the explosives used in the bomb in Londonderry. I am afraid that I have no firm information, but as soon as we have information I shall ensure that he is informed. He also asked about the need for witness protection. The protection of witnesses in connection with anti-terrorist measures is a general but acute problem, and we are giving it careful consideration.

Mr. A. J. Beith: Is the Home Secretary aware that we join in the tribute to those who, day in, day out, risk their lives and use their skills to protect the whole community against terrorists? Is he aware that we welcome the decision to get rid of exclusion orders, which we have wanted for some time and which has twice been recommended? Will he include in his review the Prevention of Terrorism (Additional Powers) Act 1996—which was rushed through the House in about a day and a half, with his support—so that we can engage in more measured consideration of its provisions?
Is it not clear, as the Home Secretary says, that, even if a peace settlement is secured in Northern Ireland, there will remain a need for anti-terrorism legislation because of the existence of threats from many different quarters? Such legislation must therefore contain sufficient safeguards to be capable of being placed permanently on the statute book. Does the Home Secretary recognise that it must safeguard the life and limb of members of our communities, but must also not hand a victory to terrorists by taking away basic liberties to which we have grown accustomed, but about which they care not at all?

Mr. Straw: I am grateful to the right hon. Gentleman for his opening remarks.
The Prevention of Terrorism (Additional Powers) Act 1996 was indeed pushed through the House very quickly with the support of the official Opposition. I make no apologies for that: the powers were needed, and—despite the claims made by, I think, the Liberal Democrats that they would somehow lead to the end of civil liberties and civilisation as we know it—the simple truth is that they have been effective, and have been used proportionately. I am not aware of a single allegation of abuse of those powers.
Of course, as we are considering permanent legislation, we shall consider all the existing temporary legislation and whether it should have a place in the permanent legislation. That includes the additional powers Act.
The right hon. Gentleman is, of course, right to say that, in framing legislation, particularly permanent legislation, we must secure a balance between the importance—the imperative—of protecting the public and security forces, and the importance, which he mentioned, of not handing a victory to terrorists by stooping to their methods. That is what we aim to do in the consultative process, and in the legislation that will follow.

Mr. Clive Soley: I warmly welcome my right hon. Friend's approach. A

proper and permanent law, framed in a way that respects both the rule of law and democracy and the fight against terrorism, is long overdue. What disturbed so many of us in the past were the exclusion orders, which were outside the rule of law and not only damaged the country's international reputation but were a permanent and continuing propaganda victory for the Provisional IRA.
Will my right hon. Friend not worry too much about sniping from Conservative Front Benchers? At the same time as lecturing us some years ago on the prevention of terrorism Act, they were engaged in secret talks with the Provisional IRA—although, of course, they denied that until forced to admit it. I think that a little less hypocrisy in general on the issue is welcome, as is the reassertion of British values, democracy and the rule of law. [Interruption.]

Madam Speaker: Whose is that telephone that is switched on? I shall not call another hon. Member until it stops.

Mr. Straw: I am happy just to listen to questions, but I fancy that hon. Members might like answers as well.
I thank my hon. Friend for his remarks, and pay tribute to him for his unstinting work in the search for peace in Northern Ireland. He is right to chide some members, not all, of the previous Administration. I recall that the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) made much about our approach to exclusion orders. It happens that, during the ceasefire, he lifted 39 exclusion orders. When it had broken down and terrorist activity was resumed, he lifted more exclusion orders than I have lifted until today. The facts speak for themselves.

Mr. Peter Brooke: Will the Home Secretary always bear it in mind that measures which may build confidence within some parts of the community can also lessen it in others?

Mr. Straw: Yes, I can, and for that reason we have paid careful attention to the balance of the proposals, and shall do so all the way through this process.

Mr. Norman A. Godman: Were all 12 of the exclusion orders that my right hon. Friend has today revoked signed against republicans? Does he not agree that, notwithstanding the need to be ever vigilant against the vicious activities of terrorists, internal exile and internment should have no place in a mature parliamentary democracy?

Mr. Straw: The answer to my hon. Friend's last point is yes. In reply to his first point, I can tell him that, of the 12 orders which were outstanding this morning, 10 were in respect of alleged IRA terrorists and two were in respect of alleged loyalist terrorists.

Mr. Andrew Robathan: I generally welcome what the Home Secretary has said. In particular, I welcome the fact that he will ensure that the police and security forces will have the powers they need. Having served in Northern Ireland and seen the effects of internment, I am ambivalent about it. However, should


the RUC wish to keep the reserve power of internment in its locker, will the Home Secretary take notice of what the RUC says and keep it?

Mr. Straw: I am afraid that I must say to the hon. Gentleman that we are not ambivalent about internment. We do not think that it has any role to play in combating terrorism and I understand that the Chief Constable of the Royal Ulster Constabulary supports our proposals to remove the powers of internment from the statute book.

Mr. Roger Stott: My right hon. Friend will be aware that not many people here today voted for the prevention of terrorism Act in 1975. I was one of them, and I continued to vote for the PTA until it became apparent that some elements of that temporary measure offended human rights. One of them was on exclusion orders. During my time as Opposition spokesman on Northern Ireland, I very much opposed the provision of those exclusion orders in the PTA.
My right hon. Friend is aware of the story that I told him about John Matthews, a young man who was arrested—

Madam Speaker: Excuse me. We have questions on statements, and I have not yet heard a question from the hon. Gentleman.

Mr. Stott: My right hon. Friend would be aware—would he not?—

Madam Speaker: Order. I am trying to protect the interests of the many hon. Members who are seeking to put questions. There are many such Members, particularly on the Government side, not all of whom will be called if we go on in this fashion.

Mr. Stott: I take your admonition, Madam Speaker.
A young man was let free from a magistrates court and then rearrested, and an exclusion order was placed on him. In opposition, my right hon. Friend promised me that, once in government, he would get rid of this. I thank him for his promise today.

Mr. Straw: I remember the detail of the case, and I am grateful to my hon. Friend for his remarks.

Mr. Patrick Nicholls: Putting this legislation on a permanent basis is obviously a good idea and the Home Secretary is to be complimented for it, but will he pause for a moment and think about this proposition? He seems to be saying that, because exclusion orders are not used very often, they need not be on the statute book. In answer to my right hon. Friend the Member for North-West Cambridgeshire (Sir B. Mawhinney), he said that he had taken account of the advice from the security forces and, a few moments ago, he said that the Chief Constable had positively advised against internment.
What was the advice on exclusion orders? I suspect that it was not that the security forces were calling for the removal of exclusion orders—it was just that they were saying effectively that they could live with their removal. Which was it?

Mr. Straw: I am grateful to the hon. Gentleman for his opening remarks. I said in my statement and again in

answer to the right hon. Member for North-West Cambridgeshire (Sir B. Mawhinney) that I had taken full account of the advice on security matters. I am not going to go into detail on the advice, but, if I had been advised that it was unsafe to lift the exclusion orders, I would not have done so.

Mr. Chris Mullin: I welcome the Home Secretary's statement. This legislation has been long due for an overhaul. Since my election to Parliament, I have voted against all anti-terrorist legislation. I share his and everyone's desire that terrorists should be caught, but the bottom line is that we should not hold terrorist suspects incommunicado for up to seven days and nights without access to the protections that suspects in other serious criminal cases enjoy. Will he give an assurance that, when the review is completed, the new legislation will protect the rights of suspects, so that some terrible mistakes will not be repeated?

Mr. Straw: I understand my hon. Friend's point. I made it clear in my statement that we have long believed that there should be a judicial element in decisions about extensions of detention. I have no doubt that the other circumstances in which people are detained will be the subject of considerable debate when we publish our consultation document.
I accept the need to ensure that there is a real balance between the rights of suspects and the imperative of the police and security forces, on infrequent but regulated occasions, to detain people in wider circumstances than arise under the Police and Criminal Evidence Act 1984. That is the issue. We will examine it in great detail, and we will be grateful to my hon. Friend for his views, too.

Ms Jennifer Jones: In the proposed legislation, will my right hon. Friend consider measures to confiscate the assets of terrorist organisations, to cut off their economic supply line for repeating their acts of terrorism?

Mr. Straw: Those points will be among the elements of the consultation document.

Mr. Jim Marshall: As one of those who down the years has dealt with these matters, I warmly welcome the decision that my right hon. Friend has announced today. I remember, as he will, being labelled the terrorists' friend, which was and remains a gross calumny. I am pleased to be reprieved by his decision today.
When my right hon. Friend introduces his more general legislation, what criteria will he use to ensure a minimum distortion of our traditional civil liberties?

Mr. Straw: I am grateful to my hon. Friend for his opening remarks. What we need is permanent legislation that balances the need to protect the safety of the public and the security forces against the need to ensure that suspects who are detained under the powers have proper rights, proportionate to the accusations they face. Also, the powers must be graduated according to the terrorist threat that exists at any particular time.
We all have to acknowledge that there is now a continuous threat of terrorism, certainly international terrorism, and there may be a continuing threat of


terrorism arising from the north of Ireland. Therefore, we need permanent powers that are flexible enough to deal with a situation in which the threat is relatively low, as well as emergencies where the threat becomes high.

Mr. Jeremy Corbyn: I thank the Home Secretary for ending the exclusion orders. It is a long overdue and welcome development. Can my right hon. Friend say a little more to the House about the judicial element in detention orders, and explain why all those in detention should not have the same access to courts as anybody arrested in the normal course of events for any other alleged or suspected criminal act?

Mr. Straw: This House has accepted over 25 years that the provisions under which terrorist suspects can be detained should be wider than those under the Police and Criminal Evidence Act 1984 because of the nature of terrorist activity. Ultimately, whether that should continue will be a judgment for the House and for the other place. It is my view that there should be that distinction but that there should be safeguards for terrorist suspects when they are detained.
We have always taken the view that one way to protect terrorist suspects is by having a judicial element in the extension of detention decisions rather than it being a decision by the Secretary of State, which is the current position under the primary legislation and which cannot be changed until that legislation is altered. How that judicial element is exercised will be considered when we are drafting the consultative document, and we will welcome the views of hon. Members on both sides of the House.

Mr. Gerald Bermingham: Does my right hon. Friend agree that, as I have said many times in the past, it does not really matter whether I am killed by a terrorist or a crook—I am still dead—that the person who kills me is still a criminal, and that therefore the rights and duties in respect of interrogation should be the same? Surely we must now recognise that terrorism is a crime, and should be treated and dealt with as a crime.

Mr. Straw: I understand my hon. Friend's point, but the simple truth is that most jurisdictions across the world, including the Republic of Ireland and many continental jurisdictions, draw a distinction between the powers needed to investigate serious but non-terrorist crimes and those needed to investigate terrorist crimes, because of the nature of the organisation behind terrorists.
We face some serious organised criminal gangs but on the whole they are not backed by states, which is the case in some forms of terrorism. That is the reality in much international terrorism and, in the past, has applied to IRA and Irish terrorism. We have to take account of that different reality in formulating the powers needed within the new anti-terrorist legislation.

Several hon. Members: rose—

Madam Speaker: Thank you. We shall now move to the business statement.

Business of the House

The President of the Council and Leader of the House of Commons (Mrs. Ann Taylor): Madam Speaker, I should like to make a statement about the business for next week.
MONDAY 3 NOVEMBER—Consideration of Lords amendments to the Firearms (Amendment) Bill.
Remaining stages of the Education (Student Loans) Bill.
TUESDAY 4 NOVEMBER—Opposition Day [3rd allotted day].
Until about 7 pm, there will be a debate on the Government's proposals for student finance, followed by a debate entitled, "The Countryside under Seige". Both debates will arise on Opposition motions.
WEDNESDAY 5 NOVEMBER—Until 2 pm, there will be debates on the motion for the Adjournment of the House.
Second Reading of the Magistrates' Courts (Procedure) Bill [Lords].
Second Reading of the Fossil Fuel Levy Bill [Lords].
Motion on the Ministerial and Other Salaries Bill.
THURSDAY 6 NovEMBER—Proceedings on the Supreme Court (Offices) Bill.
Second Reading of the Nuclear Explosions (Prohibition and Inspections) Bill [Lords].
FRIDAY 7 NOVEMBER—Debate on innovation and the role of small firms on a motion for the Adjournment of the House.
The provisional business for the following week will be as follows.
MONDAY 10 NOVEMBER—Second Reading of the Greater London Authority (Referendum) Bill.
TUESDAY 11 NOVEMBER—Second Reading of the Bank of England Bill.
WEDNESDAY 12 NOVEMBER—Until 2 pm, there will be the usual debates on the motion for the Adjournment of the House.
Second Reading of the European Communities (Amendment) Bill.
THURSDAY 13 NOVEMBER—Debate on a motion to take note of the outstanding reports of the Public Accounts Committee to which a Government reply has been given. Details will be given in the Official Report.
FRIDAY 14 NOVEMBER—Debate on policing of London on a motion for the Adjournment of the House. Details of the relevant documents will be given in the Official Report.
The House will wish to know that on Wednesday 5 November there will be a debate on the fifth framework programme for research and technological development in European Standing Committee B.
The House will also wish to know that it will be proposed that on Wednesday 12 November there will be a debate on landfill waste sites in European Standing Committee A.
Details of the relevant documents will be given in the Official Report.

[Wednesday 5 November:

European Standing Committee B—Relevant European Community documents: (a) 7310/97; (b) 10385/97, Fifth Framework Programme for Research and Technological Development (RTD). Relevant European Legislation Committee reports: (a) HC 155-ii (1997–98); (b) HC 155-iv (1997–98).

Wednesday 12 November:
European Standing Committee A—Relevant European Community document: 6692/97, Landfill Waste Sites. Relevant European Legislation Committee report: HC 155-iii (1997–8).

Thursday 13 November:

Debate on a motion to take note of the outstanding reports of the Public Accounts Committee. Relevant Reports:

Report No:
Title
HC No.
Publication Date


1
The Office of Gas Supply: The Regulation of Gas Tariffs (The Gas Cost Index)
37
14 November


2
Progress in Completing the New British Library
38
20 November


3
The Sale of the Mining Operations of the British Coal Corporation
60
21 November


4
The Construction of Quarry House
69
27 November


5
Highways Agency: The Bridge Programme
83
28 November


6
The Audit of European Community Transactions
84
4 December


7
The Hospital Information Support Systems Initiative
97
5 December


8
Information Technology Services Agency: Outsourcing The Service Delivery Operations
98
11 December


9
Resource Accounting and Proposals for a Resource-based System of Supply
167
15 January


10
Excess Vote NI DHSS

19 February


11
Excess Votes Classes I, IV, VII, XIII, XIV, XVII (7 & l3)
293
13 February


12
ODA: Turkish Universities Equipment Project
70
27 February


13
H M Treasury: The Second Sale of Shares in National Power and PowerGen
151
6 March


14
Department for Education & Employment: Financial Control of Payments made under the Training for Work and Youth Training Programmes in England
61
13 March


15
The Award of the First Three Passenger Rail Franchises
39
13 March


16
Office of Electricity Regulation, Office of Gas Supply: The Work of the Directors General of Telecommunications, Gas Supply, Water Services and Electricity Supply
89
19 March

Report No:
Title
HC No.
Publication Date


17
Health of the Nation: A Progress Report
85
20 March


18
National Savings: Financial Reporting
214
25 March


19
Former Yorkshire Regional Health Authority
432
26 March


20
Payments to the National Lottery Distribution Fund
99
27 March


21
The Management of Space in Higher Education Institutions in Wales
159
2 April


22
British Rail Maintenance Limited: The Sale of Maintenance Depots
168
3 April


23
Ministry of Defence: The Financial Management of the Military Operation in the Former Yugoslavia
242
4 April


24
Department of Transport: Freight Facilities Grants in England
284
8 April


25
Plymouth Development Corporation: Regularity Propriety and Control of Expenditure
450
8 April


REPLIES
Treasury Minute on the First to Eighth Reports from the Committee of Public Accounts 1996–97
CM 3559
12 February 1997



Treasury Minute on the Ninth Report from the Committee of Public Accounts 1996–97
CM 3577
12 March 1997



Treasury Minute on the Twelfth to Twenty-Fifth Reports from the Committee of Public Accounts 1996–97
CM 3714
16 July 1997

Friday 14 November:

Debate on policing of London. The following document is relevant: Report of the Commissioner of Police of the Metropolis 1996/97.]

Sir Patrick Cormack: I thank the right hon. Lady for her statement. I hope that she fully recovers her voice soon. I thank her for giving us two weeks' business—it is a precedent that we hope she will follow regularly.
Will the right hon. Lady confirm that in the debate on student grants and loans on Tuesday, we shall have a full explanation of why students from Scotland and the Irish Republic at Scottish universities will pay nothing for the fourth year of their degree courses, whereas students from England, Wales and Northern Ireland will have to pay £1,000? Will she also confirm that the money that is garnered from students will, in fact, go straight to the Treasury?
Will the right hon. Lady arrange for a statement next week on Government information officers? Is she aware that there is widespread concern about the reasons that a number of them have given when they have resigned? The Government are in danger of tarnishing the civil service with their own image, as the gentleman from Millbank replaces the gentleman from Whitehall. Will she take on board the concern both inside and outside the House about that matter?
Will the right hon. Lady also arrange for a statement next week, preferably as part of her business statement, assuring the House that when we come to debate


proportional representation for the European Parliament, all the stages of the Bill will be taken on the Floor of the House? Does she accept that there is concern in all quarters of the House about that change to our electoral system?
Finally, will the right hon. Lady give an idea of when she expects the report of the Select Committee on Modernisation of the House of Commons to be debated on the Floor of the House?

Mrs. Taylor: I am grateful to the hon. Gentleman for his comments on the two weeks' business that I have been able to announce. I shall endeavour to give as much notice of business as possible, although I am sure that he will appreciate that that will not be possible on all occasions. However, we shall try.
The debate on student loans will be as comprehensive as possible, in the half day that the Opposition are allowing for it. It was their choice to have a half-day rather than a full-day debate. It will be an opportunity for Ministers to answer questions on the Government's policy and to show that it is a far better approach to financing higher education than anything that the previous Government, now the Opposition, have suggested.
I do not think that a statement on Government information officers is necessary. I refer the hon. Gentleman and his hon. Friends to the evidence that Sir Robin Butler gave this week to a Select Committee. I do not think that the concerns about the matter are justified.
On the Bill to introduce proportional representation for elections to the European Parliament, we are not yet in a position to announce when Second Reading will be held. We shall discuss matters relating to the handling of the Bill in the usual way.
I hope that we shall find time to debate the Modernisation Committee report during the coming month and that that debate will not be too far away.

Mrs. Gwyneth Dunwoody: Will my right hon. Friend find time in the next week to debate the appalling news that Rolls-Royce is up for sale to any foreign firm that wishes to take it over? Is she aware that many British jobs in my constituency are now at risk? As the name Rolls-Royce has always been synonymous with the best of British workmanship, we can regard the development only with fear and trembling.

Mrs. Taylor: I understand the concerns expressed by my hon. Friend, and I know that she will be worried from a constituency point of view about the long-term outcome for that company. Ultimately, however, it will be a commercial decision. The Government will welcome any outcome that secures the long-term future of Rolls-Royce as a manufacturer of good-quality British cars.

Mr. Don Foster: I thank the Leader of the House for her business statement and particularly for her courtesy in giving us greater notice of forthcoming business. She will have noticed that the Opposition have chosen to split Tuesday's debate into two halves. Does she believe that that is to enable the two halves of the Conservative party to have their say, or does she perhaps believe that Conservative Members will save up the debate on the troubles within their party until Thursday's debate on the Nuclear Explosions (Prohibition and Inspections) Bill?
As the Leader of the House said, Tuesday' s debate on student funding will be relatively short. Will she therefore agree to hold a separate debate, in Government time, on the Government's plans to introduce resource accounting, particularly to give us an opportunity to discuss proposals to separate, in accounting terms, lending from spending? Is she aware that, if that were done, it would be possible to release significant sums to resolve immediately the higher education funding crisis, without breaching departmental spending control limits?
Does the Leader of the House acknowledge that we can reduce our need to build more roads, by making better use of existing ones? Will she arrange for a debate on Government plans to provide means to improve our use of existing roads, and particularly to discuss Government measures to address the appalling behaviour of inconsiderate motorists who hog the centre lanes of our motorways, thereby reducing the number of lanes from three to two?

Mrs. Taylor: Perhaps we are having two half-day debates next week because the Opposition do not have much to say about either of those issues and did not think that either one was worth debating for a full day.
There is not scope for a debate on the overall funding of higher education in the very near future, not least because the Government will have to find time for the Second Reading of Bills that are now ready to be considered. Higher education funding issues will, however, have to be examined—although, as I am sure the hon. Gentleman will agree, there are no simple answers. Obviously, he was speaking from the heart, or from personal experience, when he spoke of roads. I therefore trust that he has been able to respond to the Government's consultation process and to feed in his ideas in that way.

Mr. Dennis Skinner: On the question of the coal industry and the fact that there is the possibility—the danger—of another 10 pits being closed in the next 12 months or even sooner, will my right hon. Friend bear in mind the fact that, if it is right to hand over large sums to Richard Branson to run the railways industry, it should be possible to devise a system to enable coal miners to retain their jobs? If the Government find ways and means to subsidise the industry in whatever form—whether it is clean coal or some other technology—will they ensure that that money is used to take a stake in the industry? The last thing that the miners want is for the money to go into Richard Budge's pockets.

Mrs. Taylor: I know my hon. Friend's concern about the problems facing the coal industry, and other hon. Members share that concern—as was demonstrated in yesterday's debate on the Adjournment. I am sure that my hon. Friends who are Ministers in the Department of Trade and Industry have listened to all the comments that have been made.

Mr. Eric Forth: Following the Chancellor's initiation of the debate on the European single currency, may we please have an early debate on the framework for the on-going debate, which is going to last for several years? In particular, can we ensure that we highlight the possible or, indeed, likely benefits of the United Kingdom staying out of the European single currency—in the unlikely event of that succeeding—and


that we tell the British people the full implications for our nationhood of this country ever joining a European single currency?

Mrs. Taylor: If and when the time comes when the Government and Parliament recommend to the people in a referendum membership of economic and monetary union, the debate will be very full indeed.

Mr. Gordon Prentice: Is the Leader of the House aware of the latest craze that is gripping the nation's young people—the use of laser pens that can be bought for less than £20 and which can project a high-intensity beam of light up to 200 ft, or from one end of the Chamber to the other? Those pens are being used to dazzle footballers, temporarily blind bus drivers and generally cause mayhem. Will my right hon. Friend consult the Home Secretary with a view to an early statement on how the laser pens can be controlled?

Mrs. Taylor: The matter has been raised in my constituency because of incidents there, so I am aware of the concern being expressed. Those pens have on occasion been used as offensive weapons and can be classified as such if they are misused in that way.

Mr. John Bercow: The Leader of the House kindly said that the afternoon of 12 November had been earmarked for a debate on the European Communities (Amendment) Bill. May I nevertheless ask her to reconsider and instead to find time for a full two-day debate next week on the treaty of Amsterdam because, as I am sure she is aware, that treaty continues the process whereby more decisions that affect the United Kingdom are taken outwith the United Kingdom, by institutions that we do not elect and cannot remove? As there can be no issue that exceeds in importance that of democratic control of our affairs, may I plead with the right hon. Lady to allow the House a proper and full debate on the matter next week?

Mrs. Taylor: There is not time for a debate next week, but I have announced a debate for the week after.

Mr. Paul Flynn: Following the unfortunate but, I understand, accurate leak of the uprating statement, which reveals the disappointing news that basic pensions will next year be increased not in line with earnings but in line with prices, does the Leader of the House think that we should have a debate on early-day motion 1?
[That this House celebrates with joy and hope the election of what will be a great reforming Labour Government; applauds its manifesto declaration that 'all pensioners should share fairly in the increasing prosperity of the nation'; asserts that this can be achieved for the present generation of pensioners only by restoring the link between basic pensions and average earning; urges an immediate start to the promised manifesto review of 'all aspects of the basic pension and its value, second pensions including SERPS and community care' and a renewal of the commitment to retain SERPS.]
The early-day motion reminds us that the manifesto on which my right hon. Friend and I fought the general election a few months ago said that we promised that
all pensioners should share fairly in the increasing prosperity of the nation".

Mrs. Taylor: My hon. Friend knows that the Government are reviewing what should happen to pensions. I do not think that, in advance of the public consultation which, I think, ends tomorrow, it would be appropriate to make any further comment at this stage.

Mr. Edward Leigh: With regard to the forthcoming debate on the European referendum Bill, which my hon. Friend the Member for South Staffordshire (Sir P. Cormack) mentioned, does the right hon. Lady agree that it is a major constitutional change that, for the first time, the electorate will not be able to vote for an individual but will be forced to vote for a party? Will she therefore give a cast-iron commitment that there will be a full and proper debate and that it will be taken entirely on the Floor of the House? Incidentally, can she reassure me that the Labour party will not allow the gentlemen from Millbank to decide which Members of the European Parliament should be placed high on the list, thereby excluding those brave Members of the European Parliament who are trying to speak up for democracy but are being silenced by their party?

Mrs. Taylor: The hon. Gentleman asked about the European referendum Bill; I think that he may be anticipating other policies that are on his mind at the moment. I presume that he means the Bill to allow elections to the European Parliament to be by proportional representation. I have not yet announced when the Second Reading of that Bill will be, but his points can be made when that time comes.

Ms Christine Russell: My right hon. Friend joined many women from both sides of the House yesterday on the steps of Church house to raise awareness of breast cancer. As that devastating disease affects one woman in 12, will my right hon. Friend try to arrange a Government statement at the earliest opportunity on breast cancer—its prevention, care and cure?

Mrs. Taylor: My hon. Friend is right to say that the issue is of concern to many women. The campaign to increase awareness, which has been active in recent days, has made a clear impression on them. The fact that one woman in 12 can be affected by breast cancer is devastating. All those who have helped to increase awareness of the risk and the opportunities for screening are providing a good service. My hon. Friend has highlighted that today and I am therefore not sure that we need a statement in the near future.

Mr. Charles Wardle: When will the right hon. Lady find time for a debate on this country's relations with India and Pakistan? Does she agree that, in spite of the pressures of imperial history, the friendship between the British and those nations is wonderfully


strong? Is it not right, therefore, that the Foreign Secretary should be held to account for his gratuitously condescending gaffe over Kashmir?

Mrs. Taylor: I absolutely reject the hon. Gentleman's comments. I represent many people whose origins are in India or Pakistan, and I have found no difficulties with the Foreign Secretary's comments.

Mr. Derek Twigg: I welcome the changes to the Order Paper. After 90 years, they are well overdue. The changes are simple and effective and I wonder why they took so long. Many aspects of the House need modernisation. Are there any further proposals on the voting system?

Mrs. Taylor: I am grateful to my hon. Friend for his comments. We are not able to debate the report of the Modernisation Committee next week, but I hope that we shall be able to do so in the near future. We shall then be able to mention some of the other proposals that the Committee is considering and give a clearer picture of our future work. The report that we have issued is not the last word on changes to the House.

Mr. Tim Yeo: In just over a month, Ministers will go to an international conference on climate change. In view of the importance of the issue for the future of the world and the abdication of leadership on it by the Americans last week, will the Leader of the House arrange for an early debate in Government time, so that the House can examine the British Government's position before Ministers go to the conference in Kyoto?

Mrs. Taylor: The Government already have a good record on giving significant priority to environmental issues. My right hon. Friend the Deputy Prime Minister will be going to the Kyoto conference, and we are making progress. The hon. Gentleman is right to say that the Americans have not been as quick as this country to embrace the problems and find solutions, but there is evidence of progress. We have to look for any positive moves at the conference. I am sure that my right hon. Friend will do that. I do not think that there is scope for a debate in the near future.

Mr. Bill O'Brien: Will my right hon. Friend give time in the next fortnight for a debate on the Child Support Agency? Every Member of Parliament, including Ministers, receives important, tear-jerking representations from constituents. Because of the gross deterioration in the operation of the Child Support Agency, the House should be given the opportunity to debate the issue and make changes where necessary.
Does my right hon. Friend agree that next Wednesday, when we discuss the fossil fuel levy, we should be able to debate the coal mining industry? May we have a statement on that industry, because of the threat to many miners' jobs? Next Wednesday would be an opportune time for clarification on the future of the industry.

Mrs. Taylor: I shall bring my hon. Friend's remarks on the fossil fuel levy to the attention of the Ministers who are dealing with that debate.
My hon. Friend calls for a debate on the Child Support Agency. I share his worries about how that agency is operating, as do my right hon. Friends in the Government.

My hon. Friend may recall that shortly before the House rose in the summer, there was a debate in Government time on the Child Support Agency, and my right hon. Friend the Secretary of State for Social Security expressed her concerns about how the system was operating. I know that she found the debate useful, because hon. Members were able to give individual examples of the significant problems that constituents of all of us have with the CSA. My right hon. Friend was able to take on board the points made and she is now reviewing the CSA.

Mr. William Thompson: The Leader of the House may be aware of the worrying and serious development in Northern Ireland, where Sinn Fein-IRA have now extended their opposition to lawful and legitimate Protestant parades to Remembrance day parades. That shows that they are against everything that reflects the British way of life. In view of that development, will the Leader of the House arrange an urgent debate next week to consider the matter?

Mrs. Taylor: I do not know whether the specific points that the hon. Gentleman mentioned are accurate, but I believe that hon. Members on both sides of the House view the Remembrance day parades and ceremonies with great respect. That should be the case, because people from all communities and all religions were affected by the events that we commemorate on Remembrance day.

Mr. Vernon Coaker: Will the Leader of the House find time for us to debate the figures issued today by the Department for Education and Employment, which show a dramatic increase in the number of permanent exclusions from our schools? About 12,500 pupils are now permanently excluded from schools, and the seriousness of the figure is shown by the fact that 1,600 of those pupils have been excluded from primary schools. Clearly, our schools and our teachers face a crisis. The House needs to address the problem, and to try to understand some of the reasons for it and some of the difficulties involved. Many of our young people are now being forced out of school for one reason or another, and we need to address the problem as soon as possible.

Mrs. Taylor: My hon. Friend is right to say that exclusions are a serious problem for the individual children concerned and their families, and for the whole education world. We are concerned that today's figures show a further rise in the number of children permanently excluded from school. It is important that the new guidance now available is looked at by schools and that we have intervention as early as possible, to minimise the number of children who are permanently excluded. It is important to keep children in education and for them to benefit from the education to which they are entitled for as long as possible. Exclusions have to happen on some occasions, but we should be working hard to minimise the number of exclusions and their impact.

Mr. David Heath: I join others in welcoming the innovation of giving two weeks' notice of matters to be discussed.
I note that the European Communities (Amendment) Bill is to be given its Second Reading on 12 November. Can the Leader of the House help me, as I am a new member of the Select Committee on Foreign Affairs? The


Committee's first opportunity to take evidence from the Foreign Secretary on the implications of Amsterdam will be on 4 November. It will, therefore, be extremely difficult for the Committee to give adequate consideration to that and other evidence that it may wish to take, and to report back to the House before Second Reading. I should be grateful if the Leader of the House suggested any way in which that aim could be accomplished successfully.
I also have a question about the European parliamentary elections Bill. Can the Leader of the House tell us whether there will be an early introduction of a registration of political parties Bill, as one Bill cannot operate without the other?

Mrs. Taylor: On Amsterdam, I have had a letter from the Chairman of the Select Committee on Foreign Affairs. I received the letter only last night, but I am looking at the Committee's concerns, to see whether there is any way in which we can assist it in its wish to have deliberations. I do not, however, think that we can hold up the Second Reading debate on that basis.
The hon. Gentleman referred to European elections and the system of proportional representation. He is right to say that it requires the registration of political parties. The Government intend to introduce legislation on the issue, and discussions with other parties are going ahead at present.

Mr. David Drew: May I draw to my right hon. Friend's attention early-day motion 343, on the future relationship between the national health service and personal social services?
[That this House believes that overwhelming evidence from all parts of the country demonstrates that patients, service users and carers are suffering as a consequence of the organisational divide which artificially separates health care and social care, and that weaknesses in the community care system and delayed discharges are prime examples of the impact of the current divide on vulnerable individuals, their families and the wider community; notes the Government's decision to set up health action zones and make an extra £300 million available for the NHS as important and welcome developments, but also notes that collaboration and co-operation between health, social services departments and other relevant agencies whilst essential, has too often failed to deliver high quality, seamless and cost effective services; and further believes that the future configuration of the structures established to commission and deliver services should be directed by the needs of patients, service users and carers for accessible and integrated support, that existing health and local authority structures should be replaced by integrated organisations responsible for both health care and social care, and that these organisations should be democratically accountable to their local communities either through direct elections, or management boards which include significant representations from local elected members.]
Will my right hon. Friend find time for the House to debate an issue that affects all hon. Members? Community care is a wonderful idea, but we all know that there are problems with the way in which the health service and

local government social services interact. This is not an attack on local government, but a way in which we can try to bring the two services together.

Mrs. Taylor: My hon. Friend raises an issue that concerns many people: the need for proper co-operation between health and social services. The Government are not planning to introduce community care authorities to replace the existing structures in health authorities and local authorities, but we are concerned to achieve better co-operation. I know that my right hon. Friend the Secretary of State for Health in particular is looking to ensure that that operates in practice and that community care is not blocked by unnecessary regulation or by local authorities and health authorities not working together properly. It is a matter of concern, but I am afraid that I see no prospect of an early debate. I am sure that my right hon. Friends concerned will be willing to listen to any ideas that my hon. Friend may have.

Mr. John Cryer: I should like to ask my right hon. Friend for two debates. First, may we have a debate on further education, as distinct from higher education? The further education sector is crushed under the weight of corruption, a lack of accountability and a shortage of funding. Secondly, let me reiterate the calls for a debate on the mining industry. There was a debate last night on the narrow issues of subsidies and coal imports, but there are much broader questions. The coal industry will probably face destruction within 10 years at the hands of Dick Budge and the Conservative Members who flogged it off a couple of years ago.

Mrs. Taylor: I cannot add to what I have already said in respect of requests for a debate on the coal industry. However, I shall of course bring all comments to the attention of the relevant Ministers. As for further education, the Government are well aware of the financial difficulties that face many further education colleges and the position that we inherited from the previous Government. Ministers are considering the future of further education as a matter of urgency and will be making announcements in the near future.

Mr. Andrew Mackinlay: May I take my right hon. Friend back to her reply to the hon. Member for Somerton and Frome (Mr. Heath) in respect of the Bill giving effect to the Amsterdam treaty? Does she understand that there is cross-party disappointment that it will not be possible for the Select Committee on Foreign Affairs to complete a report before the Second Reading of the Bill on 12 November? That is something that members of the Select Committee and the Government should avoid in future, bearing it in mind that in our general election manifestos we all signed up to enhancing Select Committees. In view of my right hon. Friend's disappointing reply, which means that we shall not have time to produce a report before the Second Reading of the Bill, will she at least give the House an undertaking that the Bill will not proceed in Committee until the Foreign Affairs Committee has been given reasonable time to produce a report?

Mrs. Taylor: I am not sure that it is impossible for the Foreign Affairs Committee to complete its report. Select Committees have worked hard to meet the deadlines that


we all face on certain occasions. My right hon. Friend the Foreign Secretary is giving evidence next week. I understand that the Minister for Trade and Competitiveness in Europe is also giving evidence to the Select Committee on European Legislation in this House, and in another place. Therefore, while I am trying to be helpful to the Foreign Affairs Committee, I cannot give my hon. Friend the guarantees that he seeks.

Mr. Gerald Bermingham: Will the Leader of the House perhaps consider, not next week but within a short time—bearing it in mind that the Kyoto conference is approaching, Customs and Excise seems to be objecting to the reduction of VAT on insulation material and we hope to put in hand in the near future a large house building programme, which is desperately necessary to house the homeless—finding time for a debate on the building regulations? We need to debate how they stand, how they should be altered and, indeed, how they should be improved.

Mrs. Taylor: My hon. Friend has combined with some ingenuity a whole range of issues. In respect of his basic point, I am afraid that I cannot find room for a debate on the building regulations in the very near future.

Mr. Norman A. Godman: May I ask my right hon. Friend to give serious consideration to a debate on safety at sea, especially in relation to fishermen? My question is prompted by my serious concern over the refusal by the marine accidents investigation branch to sanction the lifting of the fishing vessel, the Sapphire, from the sea bed in the North sea. It is my view, as a member of a fishing family, that we owe it to the families of the men who were drowned when the vessel foundered, that the vessel should be retrieved, as

the Antares was from the Firth of Clyde, and that if the bodies are inside the vessel, they should be given a Christian burial.

Mrs. Taylor: I understand my hon. Friend's concern about a serious matter that affects him and the families involved. I regret that I cannot find time for a debate in Government time. Perhaps my hon. Friend will consider applying for an Adjournment debate or even a Wednesday morning debate, as it is clear that he takes the issue seriously.

BILLS PRESENTED

EUROPEAN COMMUNITIES (AMENDMENT)

Mr. Secretary Cook, supported by the Prime Minister, Mr. Secretary Prescott, Mr. Chancellor of the Exchequer, Mr. Secretary Straw, Mr. Secretary Blunkett, Mrs. Secretary Beckett, Dr. John Cunningham, Mr. Secretary Robertson, Mrs. Ann Taylor and Mr. Doug Henderson, presented a Bill to make provision consequential on the Treaty signed at Amsterdam on 2nd October 1997 amending the Treaty on European Union, the Treaties establishing the European Communities and certain related Acts: And the same was read the First time; and ordered to be read a Second time tomorrow, and to be printed [Bill 71].

NORTHERN IRELAND (EMERGENCY PROVISIONS

Secretary Marjorie Mowlam, supported by the Prime Minister, Mr. Secretary Straw, Mr. Secretary Robertson and Mr. Adam Ingram, presented a Bill to postpone the expiry and otherwise make amendments of the Northern Ireland (Emergency Provisions) Act 1996; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow, and to be printed [Bill 72].

Standards and Privileges

Motion made, and Question proposed,

That this House—

(i) approves the Sixth Report of the Committee on Standards and Privileges (HC 182);
(ii) accordingly suspends the honourable Member for Liverpool, West Derby (Mr. Robert N. Wareing) from the service of the House for one week, with suspension of his salary as a Member for that period; and
(iii) requires him to withdraw from the precincts of the House for that period.—[Mrs. Ann Taylor.]

Mr. Robert N. Wareing: I begin by offering my apologies to the House for failing four years ago to register a shareholding in a company under the name Robert Wareing Ltd., a shelf company listed on the public register at my home address and, of course, registered at Companies House. I hope that the House will accept that there was never any intention of concealment on my part. I receive no financial benefit of any kind and the choice of name and registered address was indeed the only reason this oversight came into the public domain.
Let me take a few moments of the House's time to explain the background and circumstances which have led to today's motion. On 28 May last, an anonymous letter posted in south Lancashire was sent to the Government Chief Whip. He held that letter until Tuesday 17 June, before he showed it to me. He said that he would show it to Sir Gordon Downey and I had no objection to that. The Government Chief Whip then said, "I will see you this evening." He made no attempt to see me that evening, but I looked him up in the Division Lobby when I was voting on the Local Government Finance Bill. Among 400 other people I was able only to ask him, "What did Sir Gordon say?" He told me that there had been a breach of the rules and he then said, "I will see you tomorrow." On 18 June I heard nothing from the Government Chief Whip and indeed I have not seen him from the time that I spoke to him in the Lobby on 17 June until now.
On Wednesday 18 June, the parliamentary Labour party passed a new rule allowing for suspension. I understand that my name was not mentioned at that meeting, but that afternoon I bumped into my hon. Friend the Member for Liverpool, Wavertree (Jane Kennedy) as I was coming out of the lift having taken constituents into the Strangers Gallery. She told me that the Government Chief Whip was planning to move my suspension at the parliamentary committee meeting that afternoon. I was in such a state—a state of great shock. I sent a letter to the Chief Whip. I had no response to that letter nor to two other letters that I sent him.
I was then presented with a statement, which I felt obliged to sign. I understand now how confessions are forced on people. The statement was drafted not by an hon. Member but by Mr. David Hill, a party apparatchik.

I signed it and was told to get myself off the premises as soon as possible. I was then in the presence of the Deputy Chief Whip.
I shall deal now with the matter of non-registration. I have never been asked by anybody why I ticked the "no" box on the registration form. The committee—not, the House should note, Sir Gordon Downey, who did not recommend any punishment—never asked me about the ticking of the "no" box. In fact, the committee never asked me anything because I was never called before it.
The reason why I ticked the "no" box—this is my first opportunity to explain—was that I believed that what I had was a retainer. That was maybe a misconception; perhaps I was wrong. I apologise for being wrong—but it was a misconception. I did not think that a retainer was within the definition of shareholding, and, of course, the company issued no shares. The retainer was paid back, with interest, from my own pocket. All the allegations in the anonymous letter were dismissed by Sir Gordon Downey and the Committee on Standards in Public Life—except the one of non-registration.
On 24 June, Sir Gordon Downey received a letter from the Government Chief Whip. That letter contained further allegations which were not in the original anonymous letter. They were new allegations of the Government Chief Whip that, in particular, I had avoided paying income tax. I would have thought that the Parliamentary Secretary to the Treasury would know that companies do not pay income tax and that corporation tax is paid only when there are profits.
The worst allegation that the Government Chief Whip made was that I had a covert relationship with a company which was believed to be a front organisation for the Bosnian Serbs, whose leaders were wanted for war crimes by the international community. That was a disgraceful allegation. All the Government Chief Whip's allegations were dismissed by Sir Gordon, who said that I would not be too distressed by his findings. He was right, I was not.
The committee, though, without ever seeing me, went on to recommend my suspension for not ticking the "no" box. I have explained to the House why I did not. Subsequently, I asked twice to appear before the committee, but both requests were turned down. I have never been before the body that now seeks my punishment. No hon. Member should ever again be sent to the Chamber to serve penance without having had a hearing before his peers.
I feel that I must say that an attempt has been made to create a scandal out of an oversight. Allegations were invented and added to those in the anonymous letter, covered by privilege and given currency. I trust that that will never happen again.

Question put and agreed to.

Ordered,
That Mr. Robert N. Wareing be suspended from the service of the House for one week, with suspension of his salary for that period; and that he do withdraw from the precincts for that period.

The hon. Member accordingly withdrew.

Special Immigration Appeals Commission Bill [Lords]

Order for Second Reading read.

The Parliamentary Under-Secretary of State for the Home Department (Mr. Mike O'Brien): I beg to move, That the Bill be now read a Second time.
Protecting and maintaining the security of our nation is the prime responsibility of the Government of the day. International terrorist organisations are a major security threat. It is therefore rightly a high priority for our police and Security Service to counter the activities of international terrorists and their supporters in the United Kingdom. However, at the same time, we must ensure that our procedures for dealing with such people meet acceptable standards of fairness.
The key point is that it is always comparatively straightforward and easy to accord decent civil rights treatment to decent, reasonable people. We all know that it is much more difficult to give the same treatment to those who behave in an uncivilised way. It is the mark of a law-abiding and civilised society which respects human rights that we acknowledge the need to do so and to accord everyone fair treatment under the law.
Those involved in terrorist activities are, wherever possible, dealt with by the criminal law. However, that is not always possible or practicable. Sometimes, they have not broken our criminal laws but, because they are associated with terrorism, we do not want them in our country.
In dealing with those involved in international terrorism and other activities that threaten the safety of our nation, the ability under the provisions of the Immigration Act 1971 to exclude or deport those foreign nationals who pose a significant threat is very important. The powers are used sparingly; all decisions must be taken personally by the Secretary of State. However, those powers make a contribution to protecting the United Kingdom from those who threaten our national security.
The arrangements that had been in place until very recently were the result of careful consideration by our predecessors in government, and are not the subject of party disagreement. It was agreed that final decisions in such cases should rest with the Home Secretary of the day and should not be subject to appeal in the normal appeals process. During the passage of the Immigration Bill in 1971, it was agreed that, where a person is liable to deportation on national security grounds, he should be entitled to have the case against him reviewed by a non-statutory panel, which would advise the Home Secretary before he reached a final decision. It was, however, accepted by all parties in the House that the final decision was a matter for the Home Secretary of the day.
Although the arrangements were the subject of some criticism from time to time, they remained in place for almost 25 years. They were, however, challenged before the European Court of Human Rights in the case of Chahal. Judgment in the case was delivered late last November.
It may be helpful to hon. Members to know that, in the six years before the Chahal judgment, the non-statutory panel considered only six cases that were non-Gulf war

related. In the exceptional conditions of the Gulf war, 51 cases were considered. We have widened—albeit slightly—the categories of those able to appear, and envisage that about five cases a year would be the most that we would think likely, in the normal course of events, to come before the commission.

Mr. David Winnick: I am listening very closely, as we all are, because the subject is very important. My interest in the subject was aroused when a constituent of mine, Raghbir Singh, was put in prison without being charged, held for more than a year and released only as a result of the judgment of the European Court of Human Rights. He was released within a week of that judgment. Had that judgment not been made, for all I know, Raghbir Singh, whether guilty or not—no charges whatever were made against him and he had lived lawfully in the United Kingdom for 12 years—might have remained in prison to this very day and beyond. Such cases must cause us much concern, as I shall obviously develop if I am called to speak in the debate.

Mr. O'Brien: I hear what my hon. Friend says. A number of matters were certainly affected by the outcome of the Chahal case. We are anxious throughout to protect the rights of every person who comes before the law and who is dealt with by the Home Secretary as well as to ensure that the security of the nation is protected. Striking that balance is what the Bill is all about. It may help the House if I give some information about the numbers of people affected and the types of cases. I shall outline the Chahal case, because it provides the basis for the Bill and is also a brief reminder of the background.
In 1990, Karamjit Singh Chahal, an Indian national with indefinite leave to remain in the United Kingdom, was made the subject of a deportation order on the grounds of national security and other reasons of a political nature, including the international fight against terrorism. The order reflected the then Home Secretary's view that there was evidence suggesting that Chahal was involved in terrorist activities connected with the Sikh separatist movement in his homeland. Mr. Chahal then claimed asylum, but his application was refused. The ground for the decision to deport him was national security and there was, at that time, no right of appeal to the immigration appellate authorities against the Home Secretary's decision. Nor was there any right of appeal against refusal of the asylum application.
The security case against Mr. Chahal was considered by the non-statutory advisory panel in accordance with the arrangements that I have already outlined. Having exhausted his domestic remedies, including judicial review, without success, Mr. Chahal applied to the European Court of Human Rights. In its judgment in Mr. Chahal's favour last November, the court found that the existing procedures for dealing with cases involving the deportation of foreign nationals on the grounds of national security—and, in particular, the arrangements for challenging decisions made by the Secretary of State in such cases—were in breach of the European convention on human rights. Specifically, it found that the procedures were deficient in respect of article 5(4) and article 13 of the convention. In brief, it found that there was no provision for the basis of any detention to be meaningfully considered by a court in national security cases and that there was no effective domestic remedy for a violation of rights under the convention.
The Government accepted the court's judgment and introduced the Bill in another place shortly after the election. Until the Bill is passed, our ability to deport a person on national security grounds is necessarily severely constrained. While the Bill is mainly required to respond to the Chahal judgment, it also gives us the opportunity to provide a right of appeal to the same commission to certain European Economic Area nationals and to those otherwise exercising rights under the treaty of Rome, in cases in which there is currently no right of appeal. Those are predominantly cases involving national security considerations.
The Bill is short and has a limited purpose. Those affected by it fall into narrow categories and I have already outlined to the House the numbers who, in normal circumstances, will be involved. The House will also bear it in mind that in the past—for example, during the Gulf war—more people became involved in such applications.
Clause 1 will establish a new body, which will be known as the special immigration appeals commission. As schedule 1 makes clear, appointments to the commission, like appointments to the immigration appellate authority, will be made by the Lord Chancellor. Members of the old advisory panel were, by contrast, appointed by the Home Secretary. When hearing an appeal, the commission will comprise three members. One will be a person who holds or has held a high judicial office—at least a High Court judge. The second must be a person who has experience of dealing with immigration appeals. As a result of an amendment made in the other place, it is now clear on the face of the Bill that that person must be either a legally qualified member of the immigration appeal tribunal or the chief adjudicator.
The qualifications of the third member are not specified in the Bill. However, it is intended that the person will have some experience of national security matters and will be familiar with the evidence that is likely to be presented to the commission. The Lord Chancellor takes the view that those arrangements will best represent a proper balance of knowledge and experience for the commission.
Clause 2 sets out the circumstances in which a person may appeal to the new commission. The Immigration Act 1971 and, more recently, the Immigration (European Economic Area) Order 1994 have previously denied any appeal in the cases described. For the most part, the cases in which there has been no right of appeal have been those in which a decision has been taken on the basis that it would be conducive to the public good on the grounds of national security.
Clause 3 provides that the new commission will be able to grant bail when a person is detained under the Immigration Act 1971 and the grounds of the detention are that it is in the interests of national security. Schedule 3 modifies the existing bail provisions in cases dealt with by the new commission.
Clause 4 represents the most important amendment made in another place. It was not clear in the original draft of the Bill whether the commission could make decisions that would be binding on the Home Secretary. As Lord Williams of Mostyn made clear on Second Reading in the other place, it had always been the intention that the decisions of the commission would be

binding on the Home Secretary. Indeed, that was an essential element of complying with the judgment in Chahal. However, what is now clause 4 of the Bill puts the question beyond doubt.
The detailed procedures for the new commission are not set out in the Bill. However, clause 5 describes some of the main areas that will be covered by the procedure rules made by the Lord Chancellor. Those rules will, in view of their importance, be subject to the affirmative resolution procedure of the House. A first draft of the rules was made available by the Lord Chancellor during the passage of the Bill in another place and it is intended that an updated version, which takes account of comments made so far, will be made available to the House before the Bill reaches Committee.
Clause 5 recognises the difficulties raised by the sensitive cases with which the commission is being created to deal. It specifically requires the Lord Chancellor, when making rules, to have regard to two equally important factors—the need to ensure that decisions that are the subject of appeals are properly reviewed, and the need to ensure that sensitive information is not disclosed contrary to the public interest. That is why the draft rules not only make it clear that an appellant will have the right to be legally represented in proceedings before the commission, but provide for possible restrictions on the need for full disclosure of the reasons for decisions to be given to the appellant. They also allow proceedings to take place in the absence of the appellant and his or her legal representative.
The Government accept that those provisions fall short of the normal demands of natural justice under the law, but they have introduced the provisions having taken account of the views expressed by the European Court of Human Rights in its judgment in Chahal and in other cases involving national security considerations. The court has explicitly acknowledged that, when national security issues are at stake, consideration will almost inevitably have to be given to confidential material and that, when that is the case, safeguards—such as the ones included in the Bill—may be essential. In such cases, the court has said that what is needed is a remedy that is "as effective as can be", given the threat to national security.
One important safeguard for the appellant will be provided by clause 6, which was inserted during the Bill's progress in another place. It expands on an idea that was in the Bill on its introduction—that the Attorney-General, or his equivalent in Scotland or Northern Ireland, should be able to appoint a person to represent the interests of the appellant in those parts of the proceedings from which he or she is excluded. That builds on an approach adopted by the Canadians, which was commended by the European court in its findings in Chahal. That person, whom we shall call the special advocate for the purpose of debate, will be a qualified lawyer and will be expected to help the commission to examine the security evidence. In particular, he will look at the evidence as if he were doing so on behalf of the appellant. There will not be the lawyer-client relationship, where the special advocate is required to disclose all information to the client. There will be a measure of confidentiality, which we think is necessary in cases involving national security.
I should like to give notice to the House that the Government will be tabling an amendment to the Bill in Committee. The amendment, although minor, is important and responds to a point that arose following consultation


with interested parties. It will provide for an appeal from the commission to the Court of Appeal on a point of law. That will mirror the existing arrangements for such a right of appeal in respect of decisions of the immigration appeal tribunal. We expect it to be a more satisfactory arrangement than leaving an appellant to seek judicial review on such a point, particularly as the commission will be chaired by a High Court judge. In addition, it may be a more efficient use of the commission's time. We are anxious to ensure that those matters of great importance do not drag on and that the procedures used can be dealt with expeditiously.

Mr. Charles Wardle: It is helpful that the Minister has been able to point to the amendment that he is to table in Committee. Since the money resolution is to be dealt with today, can he tell us what the financial effects of that amendment will be?

Mr. O'Brien: We have looked at the financial effects in broad terms and we shall provide further details in Committee. At this stage, it would be better if I waited until the Committee to give the hon. Gentleman the full view of the likely implications. However, given the number of cases likely to be dealt with—perhaps five a year, one or two of which may result in a referral to the Court of Appeal—the amounts involved are relatively small.
Despite its immigration context, I hope that the Bill will not prove to be highly controversial. It is necessary because of the judgment of the European Court of Human Rights in the case of Chahal. As the hon. Member for Hertsmere (Mr. Clappison) will accept, a Bill along the same lines would have been produced by the Conservative party had circumstances been different. It is clearly important—even with a widely accepted objective—that proper consideration is given to the detailed delivery of the objectives of the Bill. The special immigration appeals commission to be created by the Bill will deal with a small number of difficult cases. The right of appeal to the commission will ensure that the right to a proper process of those suspected of terrorist activity will be safeguarded, although within a framework that also safeguards national security.
The Bill aims to achieve the necessary balance between the need to ensure that decisions are properly reviewed and the need to ensure that information is not disclosed contrary to the public interest. Taken together, we believe that the measures will accommodate the legitimate concerns that we have about the nature and sources of intelligence information and accord the individual appellant a substantial degree of procedural justice. I commend the Bill to the House.

Mr. James Clappison: As the Minister has anticipated, the Bill has the support of the Opposition—as we indicated in another place. We would have introduced such a Bill were we still in government. We acknowledge the need to ensure full compliance with the judgments of the European Court of Human Rights in the Chahal case last November, which the Minister has described.
This country has a proud record of honouring our international obligations and commitments, although we believe that it is essential for the effective operation of

the European Court of Human Rights that due weight is given to the margin of appreciation—as it is called—for individual states. It is also important that this House has the opportunity to scrutinise proposed changes in the law to bring about that compliance. We believe that that opportunity should take the form of full parliamentary scrutiny and debate—the full rigours of the parliamentary process. We would be concerned by any curtailment of that process.
First and foremost, our concern when considering the Bill is with national security, especially in these circumstances where we are required, in effect, to balance the interests of national security with the rights of individual asylum seekers and appellants. We must bear it in mind that when the commission has been established, individuals will be able to appeal to it against decisions of the Home Secretary of the day. Those decisions will have been taken by the Home Secretary on the grounds of national security. The appeal will then go to the commission, and it will be for the commission to make a final and binding decision. That decision will bind the Home Secretary of the day through a direction in the legislation. We are concerned that commission decisions will be binding in these important cases where national security is at risk.
I welcome what the Minister has said today about a right of appeal to the Court of Appeal for the Home Secretary alone against decisions of the commission. We mooted this when the matter was deliberated in another place and I am pleased that the Minister is minded to grant such a right.

Mr. Mike O'Brien: The hon. Gentleman has misunderstood me. I am happy to listen to any points that he may make about the Bill, but the amendment that we shall be tabling deals with putting before the Court of Appeal matters of law, not with facts or the position with regard to clause 4 of the Bill. I got the impression that the hon. Gentleman thought that we were saying something else.

Mr. Clappison: The Minister has once again anticipated me. To continue to push at what appears to be an open door, I was going to invite him to consider widening the grounds of appeal to include discretion as well as points of law, because these are cases where the commission will be exercising its discretion under clause 4, as the Minister rightly said. We shall be concerned about cases involving points of law and those involving the exercise of discretion where there might be a feeling on the part of the Home Secretary of the day that the commission has got it wrong. I accept what the Minister has said—that these cases may be few and far between and that the number of cases that the commission deals with will be small. It follows that the number requiring the Home Secretary to consider an appeal against the decision of the commission will be small as well.
I do bear it in mind that the commission will be composed of eminent and experienced people. We make no criticism of its composition, but even eminent and experienced tribunals can sometimes get it wrong—if I can put it that way—in difficult and controversial cases in which others may make a different judgment. We stress the interests of national security in these matters. The Home Secretary of the day will have originally taken a decision on grounds of national security. We think it


should be open to the Home Secretary to seek a review of a commission decision which overturns the judgment of the Home Secretary. We will return to this matter in Committee.
While on the subject of possible conflict between the Home Secretary's judgments and those of the commission, I wish to take issue with the Minister on another point. I do not take great issue with the procedural rules as a whole, and I accept that they strike a fair balance in draft form between the rights of the individual and the interests of the state—especially the need for some of the evidence not to be disclosed, and I support the Minister's remarks on that. The role of the special counsel clearly will be important in this context. Under the procedure for dealing with the evidence—under rule 5, I believe—it will be for the chairman of the commission, assisted by the special advocate, to decide what evidence should be disclosed to the appellant.
The question arises: what if the Home Secretary of the day disagrees with the decision and is still concerned that sensitive information might be disclosed? The Minister should consider whether he is completely satisfied that the matter should rest with the final decision of the commission or whether it is possible to consider some way in which the Home Secretary could make further representations to the commission. In such important and sensitive matters, one cannot spend too much time on reflection.
I do not want to undermine the balance that has been created. It is in the interests of justice, in so far as it is possible, and consistent with the needs of national security, for the appellant to know the case against him and on what evidence it is based. It is also right for the appellant to have a summary of the evidence taken in his absence and to be able to comment on it.
I listened to the Minister's outline of the commission's jurisdiction under the Bill. Do the Government have any plans to extend the commission's remit beyond that which the Bill will give it? They were asked that in another place and the reply was not as fully considered as it might have been, so perhaps the Government could give us further clarification today.
How will the commission handle asylum cases involving article 3 of the human rights convention which, as the Minister and the House will know, concerns torture and inhumane treatment? Do the Government take the view, as they appeared to do in another place, that when there is a finding that the appellant is at risk under article 3, national security considerations should not come into play and there should be no balancing exercise between individual rights and national security?
I believe that the Bill's financial effects, to which the Minister referred, have escalated a little—to put it mildly—since it began its progress in another place. There the Government suggested that the annual cost of legal representation would be £1,000. That figure provoked some surprise—and requests for information about where such cheap legal representation could be found. The new figure is £20,000; perhaps the Minister could say a little more about how the calculations have been made and why the costs appear to have escalated.
We believe that the Bill deserves debate and scrutiny on several counts. It involves national security and the rights of individuals, and a balance must be struck; in

doing so, we should not lose sight of the fact that some of the people concerned are extremely dangerous, not only to their countries of origin but to the people of this country and to nationals of their country of origin living in this country. Important matters of national security are at stake and it is necessary to take some care in striking the right balance.

Mr. David Winnick: My interest arises because one of my constituents, Mr. Raghbir Singh, who had lived lawfully in the United Kingdom for 12 years, was detained and put in prison with no charges made against him; he was married to a British citizen, but had he been a United Kingdom national himself, he could not have been treated in that way.
Mr. Singh was detained as a threat to national security. He strenuously denied involvement in terrorism of any kind, but there was no way that that could be tested, as would normally be the case, in a court of law. I was, and remain, in no position to say whether he was telling the truth. How on earth could I, as his Member of Parliament, know? There was no question about his active political concern with events in India and he has frankly admitted, as the editor of a Sikh newspaper, that he wants a separate Sikh state there; but he insists that he never wanted to use terrorism to achieve that.
It is interesting to note the way in which the Sikh community at large took up Mr. Raghbir Singh's case. For all I know there may be some exceptions, but I believe that the large majority of Sikhs in this country who are actively involved in such matters have no desire to see the use of terrorism. Together with the National Union of Journalists, of which Mr. Raghbir Singh was a member, the Sikh community made its views known to many Members of Parliament of all parties, and Amnesty took up the case and made him a prisoner of conscience, which is rather unusual in the United Kingdom.
The previous Home Secretary challenged me about it, but I have never denied that the Home Secretary of the day should have powers to deal with national security, regardless of what happened to my constituent. Terrorism, as I and other hon. Members have said time and again, is one of the great curses of the modern world. The notorious suicide bombers in the middle east take the lives of men, women and children, and even babes in arms; there is no mercy when the terrorist killers strike.
Thousands of civilians have been murdered by terrorists in Algeria and Sri Lanka, not to mention the atrocities committed by the IRA and the loyalist gunmen. Only today in The Guardian, there is a story of a former head teacher who was one of the victims of the Enniskillen bombing and has been in a coma for 10 years. He had heart bypass surgery about three years before the bombing, and when he went on the Remembrance day parade 10 years ago he was not murdered, but he has now lain in a coma all this time under the tender care of his wife. That is an illustration of what terrorism means in human terms. We must never forget that for one moment.
How, in a democratic society, are we to deal with those who are considered a threat to national security, when no charges are made against them? That is entirely different from the matters involving IRA terrorism to which I have just referred. In the case of Chahal, the European Court of Human Rights, by a majority decision, found that by


detaining Mr. Chahal for six years—my constituent was in prison for a little over a year, and that was bad enough—the United Kingdom was in violation of four articles of the human rights convention.
As the Minister said, article 13 is especially important. It says:
Everyone whose rights and freedoms as set forth in this Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.
The court also found that article 5(4), which is an important safeguard in a democratic community, had been violated. Article 5(4) states:
Everyone who is deprived of his liberty by arrest or detention shall be entitled to take proceedings by which the lawfulness of his detention shall be decided speedily by a court and his release ordered if a detention is not lawful.
The European Court of Human Rights believed that that safeguard had not been observed in the case of Chahal. As I said in my intervention, if the decision had not been taken, I would be speculating not only on how much longer Mr. Chahal would have remained in prison but on how long my constituent would remain in detention. It was more than a year before he was released as a result of the judgment. These are worrying matters.
If my constituent was involved in terrorism, he deserved anything that happened to him. The Home Secretary told a deputation of Members that it was not alleged that my constituent was involved with terrorism in the United Kingdom, but I accept that if he was using the United Kingdom as a base for terrorism against a friendly country, national security considerations are involved. If we say that we are against terrorism, we mean that we are against it—it is not just empty rhetoric.
Like all occupants who hold the office, the Home Secretary was acting on advice. If that advice was wrong, not necessarily maliciously, and Raghbir Singh was, as he has always claimed, innocent, imagine what it meant to be taken away. It so happened that it was at 6 am when the knock on the door came and he was put in prison, his family left behind, and no charges made. In such cases, the person would be left in prison until the asylum application was decided and the case on security grounds would have been dealt with under the previous panel arrangement. I ask hon. Members to bear it in mind how serious such matters are when they concern people who are not involved in the terrorism that has been alleged against them.
The only remedy available, apart of course from the European Court of Human Rights, was the review of the Home Secretary's decision by a non-statutory panel. Its decision was in no way binding on the Home Secretary. I am glad that the Bill clearly sets out that the decision of the special commission will be binding on the Home Secretary, although I note the proposed amendment mentioned by the Minister, which I shall study carefully when it comes before us in Committee because it has certain aspects about which I am not altogether happy.
The special immigration appeals commission is undoubtedly an improvement on the previous procedure. It will be more like a court, although clearly very different from an ordinary court, for reasons that we understand. I am pleased that there will be a bail jurisdiction. That is certainly an improvement, but I have several questions.
Will the appellant be informed of all the allegations against him? Clause 6 states:
The relevant law officer may appoint a person to represent the interests of an appellant in any proceedings
before the proposed commission. I listened carefully to what the Minister said. In the main, I hope that people with allegations against them will be able to have their own legal representatives; that is important. If that will not be the case in certain circumstances, what arrangements will be made for the person who is appointed by the relevant Law Officer, who will be the Attorney-General in England, to represent the appellant? Will a lawyer who is appointed not by the appellant or his solicitor but by the Attorney-General take instructions from the appellant? Will he largely act as if he were the lawyer appointed by the appellant? If he does act in such a way, what would be difference between an appellant having his own lawyer and the arrangement in the Bill? Perhaps the Minister will explain. If we are to have machinery in which such allegations are made, it is surely important that every legal redress is made available to appellants. One of the most important things in a country based on the rule of law is obviously that a person should have their own lawyer to argue the case.
What about the time between detention and the hearing? How long will it take for cases to come before the commission? It should be done as speedily as possible, although there must be time for appellants to get together the necessary evidence to refute the allegations, if they intend to do so.
If the commission dismisses an appeal, what will happen—it may be rare, but it could well occur—if further evidence comes to light? Will the case go back to the commission or will the Home Secretary have powers to decide that the new evidence is compelling and be able to reverse his original decision? I accept that if an appeal is dismissed, the situation is not likely to occur, but it may.
When the Bill becomes law, will it no longer be possible for such cases to be referred to the European Court of Human Rights? I hope not. I accept that the reason for this measure is so that it will no longer be necessary to take cases to the European Court of Human Rights. In effect, we are putting the judgment of Chahal into United Kingdom legislation. Does the Bill necessarily mean that the road to the European Court of Human Rights is barred? The Minister shakes his head, so I take that as his answer.
I have already explained why I am interested in the matter, and I am sure that my constituent will be interested in it. I would like to pay tribute to two people. First, a former Member of this House, Max Madden, took up the case of Chahal on many occasions. He retired from the House at the general election, but the manner in which he pursued the Chahal case—his persistence and diligence and the time that was involved—is a tribute to the way in which he carried out his duties as a Member of Parliament. I doubt whether many votes were involved, especially as he was not standing again for election—it was a point of principle, and all praise is due to him for carrying out his duties in such a way.
I would also like to mention David Burgess, of Winstanley Burgess solicitors, who pursued the Chahal case to the European Court of Human Rights. He also advised me about matters. I realise that in Government circles—I hope that this does not apply to the present


Government—he was probably looked upon as one of those difficult characters who pursue matters when they should not and who become over-interested in civil liberties. It is a good job that we have such people in Britain. The rule of law and the democratic process is strengthened by such solicitors. I hope that cases such as those of Chahal and Raghbir Singh will be dealt with in a way very different from when they were originally detained.

Mr. Charles Wardle: I share the feelings of the hon. Member for Walsall, North (Mr. Winnick) when he condemns terrorism and I am sure that right hon. and hon. Members on both sides of the House do as well.
The Bill is necessary and it will have the support of the whole House, as my hon. Friend the Member for Hertsmere (Mr. Clappison) has already said. Until last year, the advisory panel operating under rules that flow from the Immigration Act 1971 was able to review orders to deport or exclude foreign nationals considered a threat to national security, but the Home Secretary had the final say. The Bill makes the decisions of the new statutory commission binding on the Home Secretary, in order to satisfy the European Court of Human Rights.
Anyone who followed the chain of events in the case of Karamjit Singh Chahal, from the deportation order served on him, through refusal of his asylum application and the advisory panel's review, to his application to the European Court of Human Rights and the court's judgment a year ago, will regard the Bill as an inevitable consequence of those events.
As my hon. Friend the Member for Hertsmere said, the Bill was already in preparation before the general election. Since the European Court of Human Rights found that our domestic courts were not in a position to treat with the national security aspects of cases involving terrorists and, at the same time, ruled that people facing deportation on security grounds must be allowed some means of challenging the Home Secretary's decision, a Bill giving statutory authority to new procedures was needed.
Without the Bill, it could be argued that the Government's ability to remove or bar a terrorist or other person who was a security risk might well be stymied simply by the individual's staving off the order by showing the Government's failure to meet their obligations under the convention. That conjures up an appalling prospect of known foreign terrorists at work in Britain being able to prolong their activities here and to cock a snook at the police and the Security Service by using the ironic argument that we were not treating them—in this haven of freedoms known as the United Kingdom—with internationally recognised standards of fairness.
The Bill is short. It has already been given careful and expert consideration in another place so a great deal of further clarification may not be required on Second Reading. It is important, if only for the avoidance of future doubt, that the Bill satisfies the European Court of Human Rights' unequivocal commitment to article 3 of the convention on torture or inhumane, cruel and degrading treatment, and that has been achieved.
It also helps that the Bill now clarifies the binding nature of the commission's decisions on the Home Secretary, as the Minister pointed out. Any lingering ambiguity on that score which left the European Court of Human Rights in any doubt about the new commission's ability to fulfil the spirit and purpose of articles 5 and 13 of the convention might render the legislation ineffective. Equally, it was sensible to include in the Bill the requirement that a person to be removed or barred on grounds of national security must be given notice of the right to appeal. Again, the Minister has highlighted that.
No matter how offensive it may seem to some observers that Parliament appears to be bending over backwards to be fair to terrorists, our system of justice will be all the stronger for allowing such terrorists a swift but fair appeal, independent of the Home Secretary of the day, against the charge that they are a risk to our national security.
I hope that the Minister will be able to enlarge on two aspects of the Bill in his reply to the debate. The first is the use of a special advocate to be appointed by the Attorney-General to speak up for the appellant on security evidence at a stage in the proceedings when both the appellant and the appellant's counsel will have been excluded from the hearing. The Government say that there will be no client relationship between the appellant and the special advocate yet somehow the appellant, his lawyers and the watching world, not to say the European Court of Human Rights, will be asked to accept that the advocate is fearlessly fighting the corner of the terrorist, who is not his client in any case. It is all very British. I understand and fully accept the security constraints, but I want to believe that it will work.
Can the Minister assure me that nothing in those arrangements will allow doubt to be cast on the proceedings in a way that could discredit the new commission in the eyes of the European Court of Human Rights, without the approval of which we shall be back to square one in the removal of terrorists?
My second concern is about the right under article 8 of the convention of a person refused entry clearance on the ground that leave to enter would not be conducive to the public good to appeal to the commission. The need to show exemplary fairness to a terrorist who would be a risk to public safety if he was given leave to enter, but who says that he wants to be reunited with his family in this country, will seem rather far fetched even to the most fair-minded of people. However, if that is what is needed on the statute book to prevent the European Court of Human Rights from overruling the Home Secretary's exclusion orders, I accept that it is sensible to include it in the Bill.
My concern is that the provision will set a hare running over article 8 of the convention in other broader and less controversial areas of immigration control. Let us take the example of a person who is not even remotely a security risk and is therefore not subject to the Bill, but who has for whatever other reason been refused entry clearance, say over an application for a visit visa to see part of his family resident in the United Kingdom. If the entry clearance officer has done a conscientious job and, under the Asylum and Immigration Appeals Act 1993, the scope exists for a swift internal review of the refusal by the senior entry clearance officer in post, to my thinking that individual rightly has no further right of appeal against that refusal.
Once the Bill is passed, the disappointed visitor, whose only vice seems to be that he would probably be tempted to overstay, will see that even known terrorists, who could quickly threaten the British public and be the cause of chaos and mayhem, have the statutory right to appeal against refusal of entry clearance. Every rejected visa applicant will shout, "Where's the justice in that?" Is not clause 2(2) likely to be the thin end of the wedge for British immigration control and the pressures that will be imposed by article 8 of the convention, especially when legislation is introduced in the House to incorporate the convention into British law? I hope that the Minister will be able to show me that my fears are unfounded and that this is not the thin end of the wedge
There was some mirth in another place about the limited financial provisions of the Bill, which have been changed to some extent. I do not intend to challenge the money resolution, but it is clear how painfully aware the Home Office has become of the costs of immigration control, as I repeatedly predicted would be the case when I was a Minister there and at every opportunity that I have had since then to do so. I hope that it will be in order to say to the Minister that the best way to limit expenditure in the long term and to reinforce immigration controls is to spend an admittedly large sum now—I said this to the previous Government—on processing the backlog of asylum applications as swiftly as possible. That will not only assist the genuine refugees languishing in the queue but, by getting rid of the queue, will destroy the very thing that attracts the bogus applicant—the ability to join the queue and wait here perfectly legally with the benefit of social security for up to four years before his case is heard. If the Minister can persuade the Treasury to spend a lot of money now to save vastly more every year once the queue has gone, he will achieve fundamentally important progress in immigration control, to the benefit of the whole country.
If the Minister also signals that he will consistently use the available fast-track mechanism for manifestly unfounded asylum applications such as those of the Czech and Slovak gipsies at Dover, who have travelled through another safe country where asylum could reasonably have been claimed before reaching the United Kingdom, he will have the force of the Geneva convention on his side and nothing in the Dublin convention will seriously prevent him.
If, on the other hand, the minister heeds unsound advice about resorting to nothing more than selective checks on third-country nationals arriving here, he will undermine at a stroke the control afforded by the passport date stamp, which catches out the clandestine entrant and the illegal overstayer alike. If he removes that control, he will have undermined all the good work that his Government achieved at Amsterdam, with my modest but enthusiastic support, by preserving Britain's border controls.

Fiona Mactaggart: I am pleased that the Bill is before us today. It has reminded me how old I am. I recall the time in the early 1970s when I heard a speech by Mark Hosenball, a journalist who had been excluded on national security grounds by a Labour Home Secretary for writing an article about Government communications headquarters. The then Home Secretary's decision was about as silly as that of his Conservative successor, who

removed the trade union rights of people working at GCHQ. There was clearly no evidence that Mr. Hosenball represented a threat to national security.
At the time, Members of Parliament were very concerned about the procedure Mr. Hosenball faced. He was not allowed to know whether his article or something else was leading to the decision to expel him. The panel of three wise men heard the case in his absence; he was allowed to know nothing of the case against him. Although my hon. Friend the Minister said that the issue had not divided the parties, the procedure has—on that occasion and since—made some Labour Members deeply uneasy.
Let us be honest: wrong decisions have been made. For example, it was shown that in some of the Iraqi cases the information held by the national security services was inaccurate. Following that, according to the procedure, the decisions were overturned.
We needed a better procedure, and I think that we have it here. I praise my hon. Friend the Minister, and our friends in the other place, for the quality of this law. They have listened to representations made on the original draft; the rules of procedure have been published in draft. which is very helpful. We can now feel confident that there is a proper way of hearing such cases. That is not only because we had a setback in the European Court of Human Rights, but because the best way in which to defeat terrorism is to defeat it by means of a transparent and fair procedure. We do not need to use mechanisms that require a short circuit of the rules. Of course, in some circumstances those who are before a tribunal will not know the full case against them, because that could endanger national security. I am glad that the special advocate has been put in place to take care of them.
I want to refer to some of the points made by my hon. Friend the Member for Bexhill and Battle (Mr. Wardle)—[HON. MEMBERS: "He is not your hon. Friend."] I am sorry; the hon. Member for Bexhill and Battle. We have quite different views on the subject but, surprisingly, he often talks good sense. He just did so, and I associate myself with the point that he made to my hon. Friend the Minister about the benefits of spending substantial sums now to process the backlog with which his party left us, so as to speed up the process and create a transparent and straightforward way of dealing with cases.
I want to answer the hon. Gentleman's concern about article 8. It does not entitle anyone to exercise the right to family life in the United Kingdom. Many years ago, I was associated with a series of cases that went to the European Court of Human Rights involving women whose foreign husbands were not allowed to join them here under the immigration rules at that time. We won those cases only because there was sex discrimination in relation to the exercise of article 8 on family life issues. There is no independent entitlement to exercise the right to family life in a particular country—although there is a right to family life.
Article 8, like article 5 and many other articles in the convention, has long explanatory parts which, in effect, deal with the issue of appreciation raised by the hon. Member for Hertsmere (Mr. Clappison). Article 3 contains no such qualification. It is 15 words long—the shortest article in the convention—and there is no measure of appreciation when it comes to torture and inhumane and degrading treatment. That strikes me as


proper, but when it comes to other rights—for example, the right to a fair hearing on the questions of detention, the right to family life and so on—states can curb them when that is in the interests of national security. I think that the fears that have been raised are unfounded.
I commend the Bill, because it is a sensible way of dealing with the problem. Although that problem occurs rarely, it is right for us to establish a proper procedure to deal with it.

Mr. Richard Allan: I am pleased to say that Liberal Democrats welcome the Bill as a sensible response to the Chahal case. Colleagues far more learned and eminent than me have applied themselves to the Bill in another place and were extremely satisfied with the Government's amendments. I therefore do not intend to take up too much of the House's valuable time—time that seems especially valuable on a Thursday evening.
The general substance of the Bill is acceptable to us, so I shall refer to only two outstanding matters of concern with which I hope the Minister will be able to deal. The first is the relationship with article 3 of the European convention on human rights. With the incorporation of the convention into United Kingdom law, we accept that article 3 will have to be applied, but we would prefer human rights considerations to be made more explicit in immigration law. We would like some elaboration on how the convention, once incorporated, will be applied to the Bill.
The second issue is the right of appeal for those who have applied for asylum once the national security considerations have been dealt with and their asylum applications have been handled by the special commission. At present, it appears that they will have no further right of appeal, as an asylum seeker in other circumstances would. We would like the Minister to deal with that.
I shall conclude by saying that I am enjoying seeing the Minister smile every time there is talk of spending large amounts to clear the backlog of asylum cases.

Mr. Humfrey Malins: I, too, am pleased to see that the Minister manages to smile and to show such good humour. He carried an enormous work load and, between them, he and the Parliamentary Secretary, Lord Chancellor's Department must cope with the fact that there have been more than 150,000 asylum applications—excluding dependants in this country—in the past four years, while well over 26,000 asylum appeals are still waiting to be determined along with nearly 10,000 non-asylum appeals. That is a considerable burden for the Minister to carry but, at the moment, he is doing so with great humour.
As the Minister knows, I founded the Immigration Advisory Service, a large national charity that provides free help and advice for those with rights of appeal in immigration matters. On a personal note, let me tell the Minister how glad we were that he took the trouble to come to our annual conference this year, where his presence and some—indeed, all—of what he said were greatly welcomed by all of us who were there to hear him.
I join my hon. Friends in welcoming the Bill, which is a sound and sensible measure. Let me highlight some aspects of it—one or two that appeal to me, and one or two that do not appeal to me so much. The make-up of the commission will, I think, make us all feel glad that such high-calibre people will be on it, including a High Court judge and a senior adjudicator. We also welcome the fact that those having their cases heard may be legally represented.
I think I am right in saying—I will be corrected if I am wrong—that legal aid is not applicable. As the Minister will know, organisations such as the Immigration Advisory Service and the Refugee Legal Council provide free help and advice, so there should be no bar to persons' being thoroughly well represented legally—particularly, perhaps, by the IAS. In accepting that, as I know he does, the Minister will also accept that that might require a little extra funding for that excellent body, which he knows all about.
A couple of points concern me slightly. I understand the need to balance national security with natural justice: that is terribly important, and perhaps the Bill has got it about right. The Minister will understand some of my concerns about clause 5(3)(a). A rule that allows proceedings without the appellant being given full details of the reasons for the decision that is the subject of the appeal could lead to the appellant feeling handicapped because, perhaps, his rights of appeal were being slightly undercut. Those who represent him may feel that they are not seeing the full picture. I fully understand the need to protect security, but I hope that the Minister will ensure that as far as possible the greatest possible assistance will be given to representatives of those who have rights of appeal.
Clause 5(3)(b) relates to proceedings in the absence of any person, including the appellant and his legal representative. Should we worry a little about that or may we hope that that will not happen and that as much positive help as possible will be given to the appellant and his representatives?
I was glad to hear the Minister speak about a right of appeal from the commission to the Court of Appeal. He said—he will correct me if I am wrong—that the appeal would be on a point of law. I am not sure what that means in practice, but perhaps the Minister can help. In appeals from the Queen's bench division or from other courts to the Court of Appeal, points of law are sometimes obvious. There is a well-defined case history upon which advocates can rely in drafting points of law. However, this situation is different in that it involves a new commission. I do not know what procedural rules or case law will govern it or whether the public interest immunity rules that apply in the Crown court and other courts will apply in the same or different terms to the commission. Therefore, any counsel or other person drafting a ground of appeal on a point of law might be punching in the dark without a set of precedents or much in the way of a track record that can be used to establish a clear point of law.
Under the Bill, it would be possible for an asylum application to come before the commission at precisely the same time as the issue of national security. Currently, if an asylum application is refused, the person has the right to go to an adjudicator and then to the Court of Appeal. I am slightly troubled about what might happen in practice. For example, if a finding relates to security, is the asylum matter dealt with separately? Is the right of


appeal to the Court of Appeal from the commission on asylum only in such a two-stage application? Would the appeal be on the grounds that are normally applicable to asylum rights of appeal if it were made through channels other than the commission?
I hope that those queries are clear to the Minister. It is not possible, is it, for these proceedings to be in public? By the very nature of this important matter, that cannot happen. However, it is important for the House or an appropriate outside body to be kept properly informed about the proceedings in the commission so that there is some accountability.
There have been some good speeches. The hon. Member for Walsall, North (Mr. Winnick) has a hugely impressive track record and I commend his work in this area. My hon. Friend the Member for Bexhill and Battle (Mr. Wardle) contributed greatly to the debate. The Minister will be aware that although we support the Bill, we feel that some issues should be flagged up as a pointer to the fact that we shall keep an eye on the legislation to try to ensure that, although national security is given the most serious consideration, the rights of the individual who is facing a court and tribunal are protected and enhanced as much as possible and that he is not condemned or shut away. The Minister will have taken those points on board and I am grateful to him for the way in which he has listened to us.

Mr. Mike O'Brien: I am grateful to hon. Members for the way in which they have participated in the debate. I listened with interest to their many points on the Bill, and I am pleased to note that there is broad agreement in all parts of the House that, in broad terms, the Bill is the best way forward. The commission will try to strike a balance between the rights of those engaged in due process and the need to protect national security. We are creating a mechanism that will fulfil our obligations in the light of the European Court of Human Rights judgment in the Chahal case.
The hon. Member for Hertsmere (Mr. Clappison), who leads for the Opposition on these matters, spoke about article 3 of the convention. The question was whether in the exercise of that article's provisions there was a need for balance in making our decision as to whether to give effect to it.
One of the main findings in the Chahal case was that no one could be returned to a place where he might be subjected to torture or inhumane or degrading treatment or punishment within the terms of article 3. The court concluded that Chahal could not be returned to India in the context of that article. Therefore, the guarantee is absolute in character, and a balancing exercise on a deportation issue does not come into play. We do not send people back to a place where they may be subject to breaches of article 3 provisions. The court was clear that we are not allowed to do that under the terms of the convention, and we have accepted that judgment. The hon. Member for Hertsmere said that he, too, accepted the judgment, so I assume that he will accept that that is the way in which the matter was interpreted by the court.
I was asked about the Home Secretary's right of appeal. We are still in listening mode on the Bill. We want to hear reasonable arguments from the Opposition, and most of the points by the hon. Member for Hertsmere were put

reasonably. I thank him for that and for the strength of his argument. My noble Friend Lord Williams of Mostyn made the Government's position plain when the issue of the Home Secretary's right of appeal was considered in the other place. We took the view at that stage that it was not right to have an appeal based upon issues of fact, because all sorts of practical difficulties would apply.
In an appeal based on facts rather than on a point of law, the nature of the issue means that the facts would have to be revealed in the Court of Appeal. Under what procedures would that be done? What facts would be revealed to the appellant? Are we to try to create a new mechanism for the Home Secretary to exercise in such appeals to the Court of Appeal? That raises fundamental questions about what would become public in the Court of Appeal and about what legal rights of representation were before the court. It gives rise to fundamental questions about how we would operate an appeal mechanism for the Home Secretary. It might also raise questions about whether we were fulfilling all the convention provisions. I shall listen carefully to how the hon. Member for Hertsmere puts those points in Committee, but I put him on notice that, if he seeks to introduce that provision, I shall ask him how it would be dealt with in practice in the Court of Appeal.
The hon. Gentleman rightly raised costs. There was a degree of humour during the discussions on costs in another place, and rightly so. The increase in costs mainly reflects the way in which our thinking on the role of the lawyer who is appointed to represent the appellant's interests has developed. That has been the result of our on-going consultation on the Bill with interested parties and our consideration of the implications of the first draft of the procedure rules, now that we have had them from the Lord Chancellor's Department.
In a strong speech, my hon. Friend the Member for Walsall, North (Mr. Winnick) raised issues relating to his constituent. My hon. Friend has a long record in the House of both strongly opposing terrorism and breaches of national security, and supporting human and civil rights and protecting the rights of innocent people. I acknowledge that his support for those issues is long standing.
My hon. Friend asked me some questions. Perhaps we can deal with them at greater length in Committee. He asked whether the appellant would be informed of all the allegations against him. The broad allegation will be known to the appellant—there will, of course, be a statement at the beginning of the case. A decision will be made by the commission chairman and the special advocate about what is to be disclosed. Some evidence may not be disclosed. The appellant will be given such information about the case as it is possible to give him, without putting national security at risk.
As I say, some material cannot be disclosed. In a sense, that is at the heart of the balancing act that is required in these difficult cases, but the commission will ensure that non-disclosure is kept to a bare minimum and that a decision not to disclose information is justified.
My hon. Friend and other hon. Members asked whether the special advocate could take instructions from the appellant. From my experience of practising law, the best way I can describe it is that the special advocate is like a person who is appointed by a court to represent a minor—


a child—or someone with a psychiatric or mental problem. That person does not take instructions from the client and he is not obliged to do what the client says.
In this case, a special advocate is not obliged to disclose information that he may become privy to. He does not have the lawyer-client relationship that one commonly expects, so the special advocate will not take any instructions from the appellant. It will be a different relationship. The European Court commended such a relationship in the Canadian context. It felt that it would balance national security and protecting the rights of the person before the court.
It must be emphasised that the appellant will have his own lawyer, who will be able to represent him in most of the proceedings. An effort will be made to ensure that as much information as possible is available to the appellant, who will be able to understand the context of most, but perhaps not all, of the proceedings before the commission.
My hon. Friend asked how long it would take to get a case before the commission. I agree that it should be done as quickly as possible. Notice of appeal will be given and the Secretary of State will, according to the draft procedure rules, have 42 days to provide the commission with his response, including a statement of the facts and a schedule of evidence. The intention is that cases will be heard as soon as practicable, but, clearly, the appellant will need to be given some time to prepare his case. There will certainly be no undue delay, as most appellants are likely to be detained.
My hon. Friend asked me whether the Home Secretary would be able to consider new evidence after a decision had been reached by the commission. It will be open to the Home Secretary to consider whether it is appropriate to review his decision, based on any new evidence, so he will have that ability, but of course if he does so and his decision is effected, a further involvement of the commission might become appropriate.
My hon. Friend asked whether such cases would be subject to the European convention. I confirm that the European convention will apply. If the House were to take the Government's view and to introduce the European convention into British law, people would not need to go to Strasbourg to bring the convention into effect.
With his long experience of dealing with many immigration cases, the hon. Member for Bexhill and Battle (Mr. Wardle) asked some pertinent questions. Again, he asked about the nature of the relationship between the lawyer and the special advocate and the appellant. He said that it was not quite British.

Mr. Wardle: It is all very British.

Mr. O'Brien: It is probably more Canadian, because the relationship seems to come out of the way in which the European Court viewed the situation in Canada, where the Government had set up a special advocate system, which the European Court commended. That is why we felt that we should go down that route. We believe that the special advocate relationship, which protects national security and the defendant, meets our European convention obligations, and we do not expect that it would be challenged.
In relation to visa cases, the hon. Gentleman asked how we square the circle whereby someone who is denied entry because we fear it for national security reasons can appeal, and someone who has no such problem cannot appeal. He may not be aware that we made a pre-election commitment to examine that and that it is part of our overall review of the way in which immigration and asylum law operates. I confirm that we are examining creating a fast-track appeal mechanism, so that we can ensure that such injustices do not occur. I hope that that will not cause us problems with the convention, as he fears.
The hon. Gentleman raised the backlog and various other wider issues. On this late Thursday evening, I shall not venture into a wide-ranging discussion on those issues, and I am sure that he will understand why.
My hon. Friend the Member for Slough (Fiona Mactaggart) made an excellent contribution, which was based on her wide experience of dealing with immigration law. I welcome her support, from her position of having been involved in cases and having known people who have had to deal with such issues. I thank her for her support and the strength with which she put her arguments.
I thank the hon. Member for Sheffield, Hallam (Mr. Allan) and his party for their support for the Bill. He asked about the way in which it would deal with cases where national security implications had been rejected by the commission and the person then asked for asylum. In those circumstances, the person would be dealt with in the normal course of events as an asylum seeker. I shall look at that and write to the hon. Gentleman. On the face of it, that would seem the way to proceed.
The hon. Member for Woking (Mr. Malins) made a good contribution, and I thank him for his broad support. I am grateful to him for his kind comments about my contribution at the Immigration Advisory Service conference. I am especially grateful, because he has had a distinguished career setting up that organisation and has been deeply involved in ensuring that we protect the rights of persons who come into this country as asylum seekers or immigrants and that we do so in a reasonable and fair way.
The hon. Gentleman is right to say that legal aid is not available and that we believe that the refugee legal centre and other such places will, through section 23 grants, be able to deal effectively with the cases. He suggested that they might require extra resources. Before this incarnation, I was a shadow Treasury spokesman. I learned at the feet of my right hon. Friend the current Chancellor that one does not give out money easily or wantonly. With five cases a year, I am not particularly disposed to consider applications for increases in section 23 grants. I am afraid that I have to disappoint the hon. Gentleman.
The hon. Gentleman expressed some concern about clause 5(3)(a). Perhaps we can deal with that in more detail in Committee. All I shall say is that the special advocate is there to ensure that the rights of the appellant are protected. That is what he is there for and that is what we hope he will do.
The hon. Gentleman asked about our appeal amendment and what would happen in an issue involving a point of law. The principles are broadly established, and


we do not envisage any great departure from them. The hon. Gentleman raised some other detailed questions, which will be best dealt with in Committee.
This short Bill is designed to remedy deficiencies in the existing procedures for dealing with individuals who are not British citizens and who constitute a threat to our national security. As I said earlier, the number of cases will be small—we estimate about five a year. However, the cases will be important and we must get the balancing act right between determining national security and the rights of the individual. I believe that the Bill seeks to do that and I welcome the support for it from both sides of the House. I am grateful to hon. Members for dealing with the Bill so constructively and fully.

Question put and agreed to.

Bill accordingly read a Second time, and committed to a Standing Committee, pursuant to Standing Order No. 63 (Committal of Bills).

SPECIAL IMMIGRATION APPEALS COMMISSION BILL [LORDS] [MONEY]

Queen's recommendation having been signified—

Motion made, and Question put forthwith, pursuant to Standing Order No. 52(1)(a),
That, for the purposes of any Act resulting from the Special Immigration Appeals Commission Bill [Lords], it is expedient to authorise the payment out of money provided by Parliament of any expenses of a Minister of the Crown incurred in consequence of the Act.—[Ms Bridget Prentice.]

Question agreed to.

DELEGATED LEGISLATION

Mr. Deputy Speaker (Mr. Michael J. Martin): With permission, I shall put together the motions relating to delegated legislation.

Motion made, and Question put forthwith, pursuant to Standing Order No. 118(6) (Standing Committees on Delegated Legislation),

INCOME TAX

That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Malaysia) Order 1997 be made in the form of the draft laid before this House on 25th June.

That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Singapore) Order 1997 be made in the form of the draft laid before this House on 25th June.

That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Falkland Islands) Order 1997 be made in the form of the draft laid before this House on 25th June.

That an humble Address be presented to Her Majesty, praying that the Double Taxation Relief (Taxes on Income) (Lesotho) Order 1997 be made in the form of the draft laid before this House on 25th June.—[Ms Bridget Prentice.]

Question agreed to.

PUBLIC ACCOUNTS

Ordered,

That Dawn Primarolo be added to the Committee of Public Accounts.—[Ms Bridget Prentice.]

LIAISON

Ordered,

That Mr. Peter Brooke, Sir Sydney Chapman, Dr. Michael Clark, Mr. David Davis, Mrs. Marion Roe, Mr. Dennis Turner and Mr. Nicholas Winterton be members of the Liaison Committee.—[Ms Bridget Prentice.]

Standard Spending Assessment

Motion made, and Question proposed, That this House do now adjourn.—[Ms Bridget Prentice.]

Mr. John Healey: I am grateful for the opportunity to debate the Government's plans for the standard spending assessment system. Although I represent part of the borough, my purpose is not special pleading for Rotherham. My purpose is to put the case for those urban authorities outside London which have been systematically short-changed by Government grant settlements under the Tories. I say "short-changed", but we are not talking about small sums.
In the last decade alone, £400 million has been taken from metropolitan local authorities and allocated to others. The previous Government rigged the system to benefit some councils at the expense of others. The winners, of course, were the usual Tory suspects—Wandsworth, Kensington and Westminster. The losers were Labour authorities such as Rotherham, Barnsley, Doncaster and Sheffield in South Yorkshire.
That led many of our authorities to set up a special interest group within the Local Government Association, known as SIGOMA. Local government has a special capacity to come up with awkward and unattractive acronyms. It stands for the Special Interest Group of Metropolitan Authorities (outside London). It is now 41 strong, because the 35 metropolitan authorities have been joined recently by six unitary authorities. A total of 138 Members of Parliament represent constituencies within those authorities, including some Opposition Members.
It is important to stress that SIGOMA operates within the LGA and should not be seen as a fracture within the newly—and rightly—unified local government. It should be seen as an acceptance of the fact that those authorities have a special interest. We are looking to explain our special interest and argue our special case, but we are not looking to win special favours. We simply want a fair system of finance for local councils, and we want to work with the Government to help devise it.
We recognise the constraints on what can be done immediately. We recognise the constraint of the public spending control total and the constraint of having been in office for only a short time. However, the early signs are good.
The decision to postpone changes to the area cost adjustment is right, and a commitment to commission research on a "specific cost" approach is a better way forward than proposals in the previous Government's 1996 review. The genuine consultations with local authorities on new options for this year's SSAs suggest that, at last, we have a national Government who want to work with, not against, local government. The root and branch review of the system promised for future years is very welcome. SIGOMA authorities and Members of Parliament look forward to playing a part in that work.
That is for the long term. In the short term, Ministers must make decisions on this year's SSAs. My aim tonight is to expose the worst anomalies in the SSA system with which we have been left by the previous Government, and to encourage my hon. Friend the Minister for London and Construction to give these anomalies special attention as he and his colleagues finalise their decisions in the next week

or so. We are not looking for the Government to fix our problems, because we can do that for ourselves, if we have a fair system to work within.
I have five points on my priority list for reform this year. First, we should look at the infamous "social index" for district council functions. That is the Tory index that makes Westminster the fourth most needy borough in the country. The index ranks Runnymede as 37th most deprived, and puts Windsor at 101–180 places above Rotherham, and 225 places above Barnsley.
There is also the index of additional need for county council functions which turns only on density of population. Westminster is not ranked as the fourth most deprived on that measure, but is ranked as the second most needy, topped only by Kensington and Chelsea. Those two authorities have the greatest proportion of properties in the country valued at over £320,000 for the purposes of the council tax. That is absurd, iniquitous and indefensible.
Over the summer, the Government have been looking at new indices of social need for district councils and the introduction of a new index for counties. I urge Ministers to finish the job and to bring in changes for the coming settlement.

Ms Rosie Winterton: Is my hon. Friend aware that Doncaster metropolitan borough council faces difficulties similar to those that he is describing? However, it might be possible to alleviate some of the service cuts this year if the rate capping limit was altered to allow the council to use its collection fund. That fund has been accumulated from a successful council tax collection scheme.
The use of that fund would not alter the amount ultimately paid by council tax payers, nor would it affect the public sector borrowing requirement. Does my hon. Friend agree that, if Ministers were to take that matter into consideration when setting rate capping limits, it could improve the position of councils that have collection funds?

Mr. Healey: My hon. Friend makes a good point. According to her analysis, efficient local councils are being penalised by being more efficient than the targets set for them. I hope that the Minister will bear that point in mind when he replies.
The second point on my priority list for change is how an area's population is counted. It is simple enough. Tourists and commuters are added to the resident population, but they are added on the basis that two tourists staying in an hotel place the same burden on a council as one resident, and six commuters cost the council the same as one resident. We can guess who wins on that basis.

Mr. David Watts: Does my hon. Friend agree that people in our constituencies are expecting a radical change in the SSA system this year? In particular, we want the Kent and York studies to be part of the review. We are well aware that they are not perfect, but the present system is an absolute scandal. St. Helens and Westminster have the same population, yet Westminster receives £995 in grant per person, while St. Helens receives only £583.
My council, like my hon. Friend's, has had to make tremendous cuts over the past few years. Since 1993, it has made cuts totalling £16 million, but it still had the highest increase in council tax in the north-west last year. Is it not crucial that, even if the two studies are not completed and


are not perfect, some dramatic change must take place this year if we are to avoid serious cuts in our education and social services, as well as other council services?

Mr. Healey: If I did not know my hon. Friend better, I would have thought that he intervened while I was in full flow in an attempt to stop me attacking Westminster council. He made an important point. He said that some councils were expecting radical change, but I am not as confident as my hon. Friend, as I believe that the scope for radical change this year is relatively limited. However, my hon. Friend mentioned a matter which is on my list of five priorities—the studies on care services.
I shall return to the theme that I was warming to before I was interrupted—the question of who wins when, for the purposes of grant, we count commuters and people who are staying overnight in hotels. Westminster wins handsomely. Some 81 per cent. is added to its resident population for SSA purposes, while 12 per cent. of those staying in hotels are assumed for grant purposes to be staying in overcrowded accommodation.
The upshot of those tricks in the Tory system is that this year's SSA for Westminster is £249 million, while its budget is just £215 million. In other words, this year Westminster is spending 14 per cent. less than the Government say it needs and are giving it in grant. That area is ripe for action by a Government determined to restore some fairness to the local government financing system.
Thirdly—I promise not to mention Westminster again—let us consider two serious academic studies, both mentioned by my hon. Friend the Member for St. Helens, North (Mr. Watts), designed to rebate SSAs for two critical areas of service: children's social services and residential care for elderly people.
York university and the Department of Health have studied children who come into contact with social services and what characterises their background areas. They have extrapolated the data nationally to produce a new formula. The methodology and the model are accepted, and the main research and work was completed a full 12 months ago.
Kent university has produced a soundly based, independently developed model for elderly people in residential care. It looks at the circumstances of people before they move into residential homes. The present SSA for elderly care predates community care. It is rooted in the 1980s, when local authorities were responsible only for financing and maintaining people in their own residential homes, whereas they are now responsible for all community care provision. That prospective SSA gives us an important and proper indicator of likely need.
I recognise that there are subsidiary questions about weightings, costings and the use of particular proxies within the equation, but with both those options for reform, the models are sound, well researched and overdue. I hope that Ministers will have the courage to introduce them in this year's settlement, even if we have to fine-tune them for future settlements.
Fourthly, I want briefly to discuss capital SSAs. Unlike many other SSAs, that critical SSA is based not on patterns of past spending, but on notional totals introduced in one big hit in 1990.
That means that urban authorities such as Manchester, Birmingham, Sheffield and Rotherham, which invested heavily in large-scale city centre regeneration, were

clobbered. Rotherham still has a £6-million-a-year gap between the cost of actual borrowing and the level of notional borrowing used to determine the capital SSA. Again, like many other SSA blocks, the commitment to service capital debt cannot be varied by councils year on year; it cannot be cut by policy change or by reductions in service.
Two options for change in that area have been developed by the Department's settlement working group—one to move from notional to actual capital commitments for individual authorities, and the other to move to an actual base for classes of authorities. I urge the Minister seriously to consider either of those changes for this year.
Fifthly and finally, I want to talk about the interplay between the SSA and the cap. An increase in SSA does not help areas such as Rotherham to meet local needs if there is not a pound-for-pound increase in the cap. We expect an announcement on and confirmation of the capping rules for next year at the same time as the announcement of the provisional SSA, which simply underlines the integral link between the two. As Ministers reach their final decisions over the next fortnight or so, I simply ask them to bear that matter in mind.

Mr. Jeff Ennis: My hon. Friend has outlined many of the inadequacies of the current formula-funded mechanism. I am sure that he agrees that it cannot be right for there to be an 80 per cent. expenditure differential per head between the winners and some of the losers—such as the Barnsleys, the Doncasters and the Rotherhams of this world—under the SSA formula.
I accept, as I am sure my hon. Friend accepts, that there will be winners and losers under any formula-funded mechanism. Because of the enormous differential, does he not agree that the Government—if they cannot radically overhaul the SSA system this year—should consider introducing some form of damping mechanism to reduce the current gap between the winners and the losers?

Mr. Healey: My hon. Friend is absolutely right. A damping element will be crucial in the impact that any changes to the SSA system will have in subsequent years on both winner and loser authorities. He also cited figures that some hon. Members are familiar with and that many of us have used. That list of figures shows how, throughout the Tory years, some authorities consistently won and others consistently lost, and the list is endless. I got fed up looking at league tables in which Tory authorities were consistently on top and authorities in strong, traditional Labour areas—such as South Yorkshire—were consistently near the bottom.
The prospects for next year are good. At last, it looks as if we have a Government who are ready to act on the injustices that we inherited from the Tories—although Ministers are determined to make councils argue their case. The SIGOMA group accepts that challenge, because its case is strong.
We look forward to a settlement for next year that begins the job of rebalancing the system. Moreover, we look forward to such a settlement as only the first step in establishing a fair framework for council finance, which will at last provide us with a period of long-term stability in relations between local and national Government.

The Minister for London and Construction (Mr. Nick Raynsford): I congratulate my hon. Friend the Member for Wentworth (Mr. Healey) on his success in securing this debate, and on providing us with an opportunity to discuss a subject that is of particular concern for many local authorities, whose interests within the Local Government Association are represented by the Special Interest Group of Metropolitan Authorities (outside London)—or SIGOMA, as it is commonly known. As my hon. Friend said, that is an unattractive acronym, but it encompasses many authorities that have very real needs, of which the Government are extremely mindful.
I congratulate my hon. Friend the Member also on his generosity in willingly allowing so many interventions in his speech by other hon. Members. I will attempt to do justice to the comments made in the debate by him and by my hon. Friends the Members for Doncaster, Central (Ms Winterton), for St. Helens, North (Mr. Watts) and for Barnsley, East and Mexborough (Mr. Ennis).
My hon. Friend the Member for Wentworth will be aware that we are in the process of finalising our proposals for the local government revenue finance settlement for 1998–99. My right hon. Friend the Deputy Prime Minister will make a statement on his proposals later in the autumn.
We have considered whether it would possible to be more helpful to the House and to local authorities by making the statement earlier than usual. However, I hope that hon. Members and local authorities will understand that we must use the most up-to-date data to ensure that the distribution is as fair as possible. Moreover, we must spend time ensuring that we get the very detailed calculations right. Authorities might like to note that, despite our best efforts, it seems unlikely that the statement will be made before December.
As we have not announced the provisional settlement, the House will appreciate that I am not in a position to give a detailed response to the matters raised by my hon. Friend the Member for Wentworth. SIGOMA will no doubt wish to consider its concerns in the light of our proposals. If he and other hon. Members would like it, I should be very happy, during the consultation on the settlement, to meet a delegation from SIGOMA.
Although I am not able to give detailed responses, I should like to reassure my hon. Friend the Member for Wentworth that we are very well aware of the concerns that he has articulated in this debate and that have been brought to our attention by many authorities both inside and outside SIGOMA. We promised a fairer distribution of Government grants to local authorities, and, later in my reply, I will explain the work that we have undertaken with local authorities to ensure that we deliver on that pledge in the coming settlement.
First, however, I should like to explain the far-reaching programme of work that we have initiated to review local government finance, because the conclusions of that review will have important implications for all local authorities. The review—which was announced on 24 July 1997, in parallel with the comprehensive spending review—is being conducted by task groups comprising officials and representatives from the Local Government Association.
One of the review's key elements is to examine the rationale for and effectiveness of measures to reduce needs and resource inequalities. That part of the review will examine more fundamental issues in relation to the future shape of SSAs.
We intend, for example, to commission research to investigate the scope for SSA formulae based on data other than historic spending by individual local authorities. One piece of work is expected to examine the extent to which the technique used by York university in its review of the children's social services formula—to which my hon. Friend referred—might be used for other SSA elements. Another project is due to examine whether the statistical technique that underlies most existing SSA formulae can be usefully applied more widely to non-expenditure data.
Those involved in our review of local government finance are also standing back from the technical detail to consider whether SSAs should be made more detailed, to deal more accurately with some of the spending needs that currently are reflected only implicitly. I should say, however, that others believe that the current system is too opaque and incomprehensible, and that changes should be made in the other direction, so that SSAs become easier to understand.
That provides a classic illustration of the dilemma facing any Government, and certainly this Government, in trying to ensure that we create a system that is not only fair but not totally incomprehensible, and so detailed as to defy understanding.
The review is touching also on wider distribution issues, such as equalisation, which is the process of enabling local authorities to provide a similar standard of service while charging similar council tax rates, despite variations in spending needs, costs and local tax bases. We are also reviewing the current arrangements for local authority revenue raising—including full consultation with business—and whether the business rate should be set locally.
We are examining ways in which to encourage cost-effective and efficient delivery of services. That work is being conducted in parallel with the development of a framework for the introduction of best value. We are considering what must be done so that we can end crude and universal capping and what reserve powers we will retain to control excessive tax rises. The final element of the review is to consider possible improvements to the capital finance system, including an examination of the allocation system.

Mr. Andrew Stunell: Will the Minister give way?

Mr. Raynsford: I cannot give way, because this is a time-limited debate. As the hon. Gentleman will understand, I have to reply to my hon. Friend the Member for Wentworth and other hon. Members who spoke in the debate.
From late autumn onwards, key outputs from the review will consist of a short sequence of consultation papers on specific aspects of the system, followed in the spring by proposals for change contained in a White Paper on local government. The White Paper will cover both finance and other, non-financial changes, including best value and democratic innovation.
I shall now deal with the work that we have been doing this year to ensure a fairer grant distribution. SSAs form the basis for the distribution of revenue support grant and are based on measures of spending need that apply to all local authorities. SSA calculation is discussed with representatives of local government. Having said that, we


realise that there are ways in which SSA distribution might be improved to enable a fairer distribution of Government grant between local authorities.
My officials, together with those in other Departments, have covered a great deal of ground this year in discussing with local government, in the SSA sub-group, possible changes to SSA formulae for 1998–99. We are currently considering the options that are on the table, and our provisional decisions will be announced later in the autumn.
Among the issues that have been considered this year are several about which my hon. Friend the Member for Wentworth and, indeed, Rotherham council and other SIGOMA authorities have expressed concern. We have reviewed the social and economic indices in the all other services SSA. This review involved the scrutiny of more than 100 possible indicators and led to agreement with local government on a set of ground rules to be applied in the statistical process involved. As with all investigation of changes to SSA methodology, the work has been carried out in the open.
With colleagues in the Department of Health, we have examined most of the elements of the personal social services SSA this year. This includes a review of the other social services index in the other social services SSA, which followed the same approach as the review of the social and economic indices.
Together with researchers at York university, to whom we have already alluded, we have done some more work on a new formula to reflect the need to spend on children's social services following the implementation of the Children Act 1989. Many local authorities consider it a clear improvement on the present formula, but others believe that some important issues have yet to be resolved. One such issue is the extent to which variations in fostering costs are reflected, and another is whether there should be an indicator of ethnicity.
In a similar vein, we have taken forward the work done last year by Kent university in deriving a formula for elderly residential social services which takes account of the community care changes of 1993. This has also had a mixed reception. Some authorities believe that it should be implemented because they think it is a clear improvement on the present formula; others would like further investigation of some of the data before a change is adopted.
The way in which visitors and commuters are treated in the all other services SSA formula has also been the subject of investigation. The fact that the present formula implicitly assumes that visitors and commuters are as deprived as the people who live in the area to which they travel has often been criticized.
There are several options for changing this aspect of the formula for 1998–99. The available options cover a range of different assumptions as to how the costs relating to visitors

and commuters in areas of high population density or sparsity should be applied. We shall need to decide whether any of the options represents a clear improvement on the present formula.
The area cost adjustment allows for higher costs in London and the rest of the south-east. It is another element of SSAs which is often subject to criticism. More work on this has been done this year to build on the findings of the 1996 Elliott review. Although those options remain available for consideration, we have recently announced that we intend to commission further research to examine the specific cost approach to calculating the ACA. The research is expected to be concluded in May next year.
Metropolitan authorities have this year been involved in discussions about the capital financing SSA, the other issue raised by my hon. Friend. An option using figures for actual, rather than notional, levels of debt in 1990 has been proposed, and several more technical adjustments have been suggested. We recognise that a move to the use of actual debt has many advocates, including my hon. Friend, but it also has many opponents. Although some see it as a more accurate way of reflecting authorities' need for spending, others suggest that it would unfairly penalise authorities which have chosen to pay off their debts.
I have outlined just some of the aspects of SSA methodology which have been considered this year. They highlight the difficulty of trying to achieve a balance and fairness. We are clear that any system we adopt must be lasting and must command the confidence of local government. We will not rush into changes.
For that reason, I have to disappoint my hon. Friend the Member for St. Helens, North, who called for radical changes this year. As my hon. Friend the Member for Wentworth rightly recognised, we have to be very careful about making changes that will have a dramatic effect on local authority budgets. My hon. Friend the Member for Barnsley, East and Mexborough made that very point.
My hon. Friend the Member for Doncaster, Central mentioned the collection fund. Sums raised in one year in excess of the anticipated yield of council tax must rightly be applied to the following year's budget; otherwise, there could be a perverse incentive for authorities to collect more than the council needed to meet its budget.
This has been an interesting debate on an important subject, and I am grateful to my hon. Friend the Member for Wentworth for giving us the opportunity. I hope that I have been able to show the Government's real concern to ensure a move towards a fairer system of support for local authority spending. I hope that, as and when my hon. Friend sees the results of our discussions later this autumn, he will feel that his confidence that we are making progress is fully justified.

Question put and agreed to.

Adjourned accordingly at six minutes to Seven o'clock.